Company P Purchased a 80% Interest in the Company S

Multiple Choice

Company P purchased a 80% interest in the Company S on January 1, 20X1, for $600,000. Any excess of cost is attributed to the Company's building with a 20-year life. The equity balances of Company S are as follows: $\begin{array}{lrr}&\text { January } 1,20 \mathrm{X} 1&\text { December } 31,20 \mathrm{X} 4\\\text { Common stock, } \$ 10 \text { par } & \$ 100,000 & \$ 140,000 \\\text { Other paid-in capital } & 200,000 & 280,000 \\\text { Retained earnings } & 250,000 & 450,000\end{array}$ The only change in paid-in capital is a result of a 40% stock dividend paid in 20X3. The cost to simple equity conversion to bring the investment account to its December 31, 20X4, balance is ____.

A) $30,000
B) $136,000
C) $160,000
D) $256,000