James Corporation owns 80 percent of Carl Corporation's common stock. During October, Carl sold merchandise to James for $297,500. At December 31, 60 percent of this merchandise remains in James's inventory. Gross profit percentages were 20 percent for James and 30 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

• $42,840.

• $53,550.

• $89,250.

• $35,700.