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Question - During 2017, Von Co. sold inventory to its wholly-owned subsidiary, Lord Co. The inventory cost $30,000 and was sold to Lord for $44,000. For consolidation reporting purposes, when is the $14,000 intra-entity gross profit recognized?
A) When Lord pays Von for the goods.
B) When goods are sold to a third party by Lord.
C) When Von sold the goods to Lord.
D) When Lord receives the goods.
E) No gain can be recognized since the transfer was between related parties.
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