REFERENCE: 01-06
Clancy Incorporated Sold $210,000 of Its Inventory to Reid

REFERENCE: 01-06
Clancy Incorporated sold $210,000 of its inventory to Reid Company during 2018 for $350,000.Reid sold $224,000 of this merchandise in 2018 with the remainder to be disposed of during 2019.Assume Clancy owns 30% of Reid and accounts for its investment using the equity method.
-What journal entry will be recorded in 2019 to recognize its share of the intra-entity gross profit that was deferred in 2018?
A.
$\begin{array}{llr} \text { Equity in income of Reid } &\$50,400\\ \text { Investment in Reid } & &\$50,400\\\end{array}$

B.
$\begin{array}{llr} \text {Investment in Reid } &\$50,400\\ \text { Equity in income of Reid } & &\$50,400\\\end{array}$

C.
$\begin{array}{llr} \text { Equity in income of Reid } &\$15,120\\ \text {Investment in Reid } &&\$15,120\\\end{array}$

D.
$\begin{array}{llr} \text { Investment in Reid } &\$15,120\\ \text { Equity in income of Reid } &&\$15,120\\\end{array}$

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