Clancy Incorporated, Sold $210,000 of Its Inventory to Reid Company

Clancy Incorporated, sold $210,000 of its inventory to Reid Company during 2013 for $350,000. Reid sold $224,000 of this merchandise in 2013 with the remainder to be disposed of during 2014. Assume Clancy owns 30% of Reid and applies the equity method. What journal entry will be recorded in 2014 to realize the intra-entity profit that was deferred in 2013?

A) Entry A.
B) Entry B.
C) Entry C.
D) Entry D.
E) No entry is necessary.