Pine & Scent Scenario

Multiple Choice

Pine & Scent scenario:
Pine Company purchased a 60% interest in the Scent Company on January 1, 20X1 for $360,000. On that date, the stockholders' equity of Scent Company was $450,000. Any excess cost on 1/1/X1 was attributable to goodwill. Pine purchased another 20% interest on January 1, 20X4 for $200,000. On January 1, 20X4, Scent Company's stockholders' equity was $700,000, the entire increase due to retained earnings.
-Refer to the Pine and Scent scenario. As part of the consolidation process, the excess of cost over book on the new block of shares is treated as

A) additional goodwill
B) a loss on acquisition of additional subsidiary shares
C) an increase to Pine's Investment in Scent account
D) a reduction in parent's paid-in capital in excess of par