A subsidiary sells merchandise to its parent at a markup of 30% on cost. In 2017, the parent paid $1,040,000 for merchandise received from the subsidiary. By year-end 2017, the parent has sold $780,000 of the merchandise to outside customers for $850,000, but still holds the other $260,000 in its ending inventory.
Which statement is true concerning the above information reported on the 2017 consolidated financial statements?
A. Consolidated cost of goods sold should be $780,000.
B. The consolidated ending inventory balance should be $200,000.
C. Consolidated cost of goods sold should be $800,000.
D. Consolidated sales should be $1,040,000.