Panner, Inc., owns 25 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $91,000 and then sells it to Watkins for $130,000. At the end of the year, Watkins still holds only $22,400 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method? Multiple Choice $10,080. $4,080. $12,480. $1,680