P Company purchased a 90% interest in S Company on January 2, 2013. It accounts for its investment in S Company using the cost method. P Company bought S Company because S Company was its primary supplier of merchandise for resale. During 2011, P Company bought merchandise from S Company. The selling price to P Company was $300,000. S Company uses a 25% markup on cost. At the end of 2013, P Company still had in its books 25 percent of the inventory purchased from S Company. In 2014, the intercompany sales totaled $280,000 with 20 percent left in inventory at the end of the year. What is the unrealized profit in ending inventory at the end of 2013?

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