Yukon CoAcquired 75% Percent of the Voting Common Stock of Ontario

Multiple Choice

Yukon Co.acquired 75% percent of the voting common stock of Ontario Corp.on January 1, 2018.During the year, Yukon made sales of inventory to Ontario.The inventory cost Yukon $260,000 and was sold to Ontario for $390,000.Ontario held $60,000 of the goods in its inventory at the end of the year.The amount of intra-entity gross profit for which recognition is deferred, and should therefore be eliminated in the consolidation process at the end of 2018, is:

A) $15,000.
B) $20,000.
C) $32,500.
D) $30,000.
E) $110,000.