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Jubilee, Inc., owns 25 percent of JPW Company and applies the equity method. During the current year, Jubilee buys inventory costing $91,000 and then sells

Jubilee, Inc., owns 25 percent of JPW Company and applies the equity method. During the current year, Jubilee buys inventory costing $91,000 and then sells it to JPW for $130,000. At the end of the year, JPW still holds only $22,400 of merchandise. What amount of gross profit must Jubilee defer in reporting this investment using the equity method?

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