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In an intra-entity inventory transaction, how should we consider the beginning unrealized gross profit when we calculate consolidated cost of goods sold (COGS) and equity

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In an intra-entity inventory transaction, how should we consider the beginning unrealized gross profit when we calculate consolidated cost of goods sold (COGS) and equity income, respectively? We should subtract it from consolidated COGS and add it to equity income. We should add it to both consolidated COGS and equity income. We should subtract it from both consolidated COGS and equity income. We should add it to consolidated COGS and subtract it from equity income

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