Yukon Co Acquired 75% Percent of the Voting Common Stock of of Ontario

Multiple Choice

Yukon Co. acquired 75% percent of the voting common stock of Ontario Corp. on January 1, 2011. 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 still had $60,000 of the goods in its inventory at the end of the year. The amount of unrealized intercompany profit that should be eliminated in the consolidation process at the end of 2011 is

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