Partridge Purchased a 60% Interest in Sparrow on January 1

Multiple Choice

Partridge purchased a 60% interest in Sparrow on January 1, 2016, for $240,000.At the time of the purchase, Sparrow had the following stockholders' equity:
$$\begin{array} { l r } \text { Common stock } ( \$ 10 \text { par } ) & \$ 80,000 \\\text { Retained earnings } & \underline { 120,000 } \\\quad \text { Total stockholders' equity } & \$ 200,000\end{array}$$
Any excess is attributable to goodwill.On January 1, 2016, the retained earnings of Sparrow was $175,000.The entire investment was sold for $300,000 on January 1, 2016.At that date, Partridge had on hand inventory it had purchased from Sparrow for $50,000.Sparrow has a gross profit percentage of 40%.The gain (loss) was ____.

A) $105,000
B) $81,000
C) $27,000
D) $39,000