Senior Inc. owns 85% of junior inc. during 20X8

Senior sold good with the 25% gross profit to Junior. Juniors sold all these goods into 20X8. How should to 20X8 consolidated income statement items be adjusted?

A. No adjustment is necessary

B. Sales and cost of goods sold should be reduced by 85% of the intercompany sales

C. Net income should be reduced by 85% of the gross profit an intercompany sales

D.Sales and cost of goods sold should be reduced by the intercompany sales