Jubilee, Inc., owns 25 percent of JPW Company and applies the equity method. During the current year, Jubilee buys inventory costing $79,200 and then sells it to JPW for $132,000. At the end of the year, JPW still holds only $24,200 of merchandise. What amount of gross profit must Jubilee defer in reporting this investment using the equity method? Multiple Choice $2,420. $12,920 $5,120 $9,020 O Alex, Inc., buys 40 percent of Steinbart Company on January 1, 2020, for $648,000. The equity method of accounting is to be used. Steinbart's net assets on that date were $1.40 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows: Year 2020 2021 Cost to Steinbart $159,040 127, 360 Transfer Price $224,000 199,000 Amount Held by Alex at Year-End (at transfer price) $56,000 63,000 Inventory held at the end of one year by Alex is sold at the beginning of the next. Steinbart reports net income of $82,000 in 2020 and $116,400 in 2021 and declares $30,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2021? Multiple Choice $54,884. $48,884 O $35 354