Padre Company purchases inventory for $70,000 on Mar 19, 20X8 and sells it to Sonny Corporation for $95,000 on May 14, 20X8. Sonny still holds the inventory on December 31, 20X8, and determines that its market value (replacement cost) is $82,000 at that time. Sonny writes the inventory down from $95,000 to its lower market value of $82,000 at the end of the year. Padre owns 75 percent of Sonny.

Based on the information given above, by what amount should Sonny write down inventory in its books?

Multiple Choice

• $14,000

• $15,000

• $13,000

• $16,000

Please help! My calculations lead me to 13K, but I cannot justify! If my answer is incorrect please indicated which is correct for reference!