How does the equity method adjust the parent's Equity in Earnings account for intra$-$entity gross profits in ending inventories from downstream sales to an $80\%$ owned affiliate?

Multiple choice question.

None of the intra$-$entity gross profits in ending inventory are deferred.

$80\%$ of the intra$-$entity gross profits in ending inventory are deferred.

$100\%$ of the intra$-$entity gross profits in ending inventory are deferred.

$20\%$ of the intra$-$entity gross profits in ending inventory are deferred.