James Corporation owns 80 percent of Carl Corporation's common stock. During October, Carl sold merchandise to James for $140,000. At December 31, 60 percent of this merchandise remains in James's inventory. Gross profit percentages were 30 percent for James and 40 percent for Carl. The amount of intra-entity gross profit in inventory at December 31 that should be eliminated in the consolidation process is

Multiple Choice

• $33,600.

• $25,200.

• $56,000.

• $26,880.