Use the Following Information to Answer the Question(s)below

Multiple Choice

Use the following information to answer the question(s) below..
Pelga Company routinely receives goods from its 80%-owned subsidiary,Swede Corporation.In 2011,Swede sold merchandise that cost $80,000 to Pelga for $100,000.Half of this merchandise remained in Pelga's December 31,2011 inventory.This inventory was sold in 2012.During 2012,Swede sold merchandise that cost $160,000 to Pelga for $200,000.$62,500 of the 2012 merchandise inventory remained in Pelga's December 31,2012 inventory.Selected income statement information for the two affiliates for the year 2012 was as follows:

-What amount of unrealized profit did Pelga Company have at the end of 2012?

A) $10,000
B) $12,500
C) $50,000
D) $62,500