On January 1, Balanger Company buys 10 percent of the outstanding shares of its parent, Altgeld, Inc. Although the total book and fair values of Altgeld’s net assets equaled $3.2 million, the price paid for these shares was $340,000. During the year, Altgeld reported $415,000 of separate operating income (no subsidiary income was included) and declared dividends of $35,000. How are the shares of the parent owned by the subsidiary reported at December 31?

a. Consolidated stockholders’ equity is reduced by $340,000.

b. An investment balance of $378,000 is eliminated for consolidation purposes.

c. Consolidated stockholders’ equity is reduced by $378,000.

d. An investment balance of $358,000 is eliminated for consolidation purposes.