Stubbs Company, the 80%-Owned Subsidiary of Petrill Corporation, Sells Merchandise

Stubbs Company, the 80%-owned subsidiary of Petrill Corporation, sells merchandise to Petrill at a gross margin rate of 25%. Intercompany sales during the fiscal year ended June 30, 2006, were $100,000. Petrill's ending inventory of merchandise obtained from Stubbs was $60,000 at billed prices, an amount $20,000 larger than the beginning inventory. The June 30, 2006, working paper elimination (in journal entry format) for Petrill Corporation and subsidiary includes a:

A) Debit of $25,000 to Gross Margin on Sales-Stubbs
B) Debit of $2,000 to Minority Interest in Net Assets of Subsidiary
C) Debit of $80,000 to Sales-Stubbs
D) Credit of $10,000 to Inventories-Petrill