A subsidiary sells merchandise to its parent at a markup of 25% on cost. In the current year, the parent had $75,000 in merchandise purchased from the subsidiary in its beginning inventory. During the current year, the parent paid $750,000 for merchandise from the subsidiary. By year-end, the parent has sold $700,000 of merchandise purchased from the subsidiary to outside customers for $900,000.

1.

What is consolidated sales revenue for the year?

a. $ 900,000

b. $1,650,000

c. $1,500,000

d. $ 750,000

2.

What is consolidated cost of goods sold for the year?

a. $ 900,000

b. $1,300,000

c. $ 560,000

d. $ 750,000

3.

What is consolidated inventory at year-end?

a. $125,000

b. $100,000

c. $ 25,000

d. $200,000