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Cayman Inc. bought 30% of Maya Company on January 1, 2018 for $450,000. The equity method of accounting was used. The book value and fair

Cayman Inc. bought 30% of Maya Company on January 1, 2018 for $450,000. The equity method of accounting was used. The book value and fair value of the net assets of Maya on that date were $1,500,000. Maya began supplying inventory to Cayman as follows:

Cost to Maya Transfer Price Amount Held by Cayman at Year-End
2018 $ 30,000 $ 45,000 $9,000
2019 $ 48,000 $ 80,000 20,000
Maya reported net income of $100,000 in 2018 and $120,000 in 2019 while paying $40,000 in dividends each year. What is the investor's share of gross profit on intra-entity inventory sales that should be deferred on December 31, 2018?

Select one:

A.

$9,000.

B.

$4,500.

C.

$6,000.

D.

$900.

E.

$3,000.

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