_____ in 2005, Punco Sold Inventory Costing $60,000 to Its

Multiple Choice

_____ In 2005, Punco sold inventory costing $60,000 to its 100%-owned subsidiary, Sunco, for $100,000. At 12/31/05, $20,000 of this inventory was reported in Sunco's balance sheet. In 2006, Sunco resold this inventory for $30,000. What is the unrealized intercompany profit at 12/31/05?

A) $8,000
B) $10,000
C) $20,000
D) $30,000
E) None of the above.