Prince owns 30% of watkins and applies the equity method. during the current year, prince buys inventory costing $72,000 and sells it to watkins for $120,000. at the end of the year, watkins still holds 70,000 of the inventory. what amount of unrealized gross profit must prince defer?

zero

Explanation:

The sale is made downstream, from the investor company to the investee.

Also, is important to notice Prince hasn't controlling interest, it should has a subtancial participation on Watkinds but the mayority fothe shares are from third parties.

Therefore, there is no unrealized gross profit to defer as the sale was made between different entities.

answer makes less frequent trips to the bank and firms make less frequent price changes;