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The financial statements of Post Company and Stamp Company on December 31, Year 5, were as follows: BALANCE SHEETS Assets Cash Accounts receivable Inventories Equipment (net) Buildings (net) Investment in Stamp (at cost) Post $ 50,000 250,000 3,000,000 6,150,000 2,600,000 850,000 $ 12,900,000 Stamp $ 10,000 100,000 520,000 2,500,000 500,000 $3,630,000 Liabilities and Shareholders' Equity Current liabilities Long-term liabilities Common shares Retained earnings $ 300,000 4,000,000 3,000,000 5,600,000 $ 12,900,000 $ 170,000 1,100,000 500,000 1,860,000 $3,630,000 STATEMENTS OF INCOME AND RETAINED EARNINGS Post Stamp Sales revenue $3,500,000 $ 900,000 Other revenues 300,000 30,000 3,800,000 930,000 Cost of goods sold 1,700,000 330,000 Selling and administrative expenses 300,000 100,000 Other expenses 200,000 150,000 Income tax expense 300,000 70,000 $2,500,000 $ 650,000 Net income 1,300,000 280,000 Retained earnings, beginning balance $4,500,000 $ 1,600,000 5,800,000 18,800,000 Dividends declared 200,000 20,000 Retained earnings, ending balance $5,600,000 $ 1,860,000 Additional Information Post owns 70 percent of Stamp and carries its investment in Stamp on its books by the cost method. During Year 4, Post sold Stamp $100,000 worth of merchandise, of which $60,000 was resold by Stamp in the year. During Year 5, Post had sales of $200,000 to Stamp, of which 40 percent was resold by Stamp. Intercompany sales are priced to provide Post with a gross profit of 30 percent of the sales price. On December 31, Year 4, Post had in its inventories $150,000 of merchandise purchased from Stamp during Year 4. On December 31, Year 5, Post had in its ending inventories $100,000 of merchandise that had resulted from purchases of $350,000 from Stamp during Year 5. Intercompany sales are priced to provide Stamp with a gross profit of 60 percent of the sale price. Both companies are taxed at 25 percent. To calculate Post's consolidated income tax expense, first add together the unadjusted totals from Post's and Stamp's separate- entity financial statements. What is the adjustment to this figure related to the unrealized profit in beginning inventory for the year ended December 31, Year 5? Multiple Choice $22,500 X $24,000 $25,500 $28,000