Tower Inc. owns 30% of Yale Co. and applies the equity method. During the current year, Tower

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Question:

Tower Inc. owns 30% of Yale Co. and applies the equity method. During the current year, Tower bought inventory costing $66,000 and then sold it to Yale for $120,000. At year-end, only $24,000 of merchandise was still being held by Yale. What amount of intra-entity inventory profit must be deferred by Tower?

A. $6,480.

B. $3240.

C. $10800.

D. $16200.

E. $6610