_____ (Module 2) Pakco Sold Inventory to Its 100%-Owned Subsidiary

_____ (Module 2) Pakco sold inventory to its 100%-owned subsidiary, Sakco, in 2005 and 2006. At 12/31/05, $24,000 of intercompany profit was deferred in consolidation using the partial equity method. The related inventory was resold to an outside party in early 2006. At 12/31/06, $25,000 of intercompany profit was deferred in consolidation using the partial equity method. At 12/31/06,

A) Consolidated retained earnings are $25,000 more than the parent's retained earnings.
B) Consolidated retained earnings are $25,000 less than the parent's retained earnings.
C) Consolidated retained earnings are $1,000 more than the parent's retained earnings.
D) Consolidated retained earnings are 1,000 less than the parent's retained earnings.