1. Mazoezi Ltd owns 40% of Jidai Inc. and applies the equity method. In 2020, Mazoezi sells merchandise costing KShs 210,000 to Jidai for KShs 280,000. Jidais ending inventory includes KShs 60,000 purchased from Mazoezi. What amount of unrealized gross profit must be deferred in the equity method entry?

a.) KShs 6,000 b.) KShs 7,000 c.) KShs 60,000 d.) KShs 15,000