Gargiulo Company, a 90% owned subsidiary of Posito Corporation, transfers inventory to Posito at a 25% gross profit rate. The following data are available pertaining specifically to Posito's intra-entity purchases from Gargiulo. Gargiulo was acquired on January 1, 2017. 201720182019Purchases by Posito$8,000 $12,000 $15,000 Ending inventory on Posito's books 1,200 4,000 3,000 ??Assume the equity method is used. The following data are available pertaining to Gargiulo's income and dividends.? 201720182019Gargiulo's net income$70,000 $85,000 $94,000 Dividends paid by Gargiulo 10,000 10,000 15,000 ?For consolidation purposes, what amount would be debited to cost of goods sold for the 2019 consolidation worksheet with regard to the unrecognized intra-entity
gross profit remaining in ending inventory with respect to the 2019 intra-entity transfer of merchandise?
A. $3,760.
B. $600.
C. $750.
D. $675.
E. $3,000.
Answer: C
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