Morneau Company, a 100% owned subsidiary of Robertson Corporation, sells inventory to Robertson at a 30% profit on selling price.The following data are available pertaining to inter-company purchases by Robertson:

Inter-company sales

Unsold at year end

(based on selling price)

2016:

$17,600

2016:

$3,200

2017:

$24,300

2017:

$5,700

2018:

$27,000

2018:

$4,800

Morneau's profit numbers were $113,000, $204,000 and $225,600 for 2016, 2017, and 2018, respectively.Robertson received dividends from Morneau of $21,000 for 2016 and 2017, and $25,000 for 2018.

Assume Morneau uses the cost method to account for its investment in Robertson. Compute the amount of beginning of year [ADJ] adjustment necessary for consolidation for the year ended December 31, 2017.

a. $112,040

b. $ 92,000

c. $113,000

d. $ 91,040