Pam purchased 10 percent of Sun Companys 100,000 shares of common stock on January 2 for $100,000.

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Question:

Pam purchased 10 percent of Sun Company’s 100,000 shares of common stock on January 2 for $100,000. On December 31, Pam purchased an additional 20,000 shares of Sun for $300,000. There was no goodwill as a result of either acquisition, and Sun had not issued any additional stock during the year. Sun reported earnings of $600,000 for the year. What amount should Pam report in its December 31 balance sheet as an investment on Sun?

a $340,000

b $400,000

c $460,000

d $580,000