1. A subsidiary sells merchandise to its parent at a markup of 25% on cost. In 2014, the parent paid $750,000 for merchandise received from the subsidiary. By year-end 2014, the parent has sold $500,000 of the merchandise to outside customers for $800,000, but still holds the other $250,000 in its ending inventory. Which statement is false concerning the information reported on the 2014 consolidated financial statements?

A. Consolidated sales are $800,000

B. Consolidated cost of goods sold is $500,000

C. Consolidated ending inventory is $200,000

D. Eliminating entries on the 2014 working paper reduce cost of goods sold by $700,000