During 2019, X Company which is 90% owned by Y Company, sold inventory to its parent for $1,000,000 at a 25% mark-up-on-cost and 30% of these goods remained in Y's inventory at year-end.Both companies enjoy a tax rate of 40% and have fiscal year ends on December 31^st. Inventory turns frequently during the course of the year.

Compute the before tax profit in ending inventory?

1. $75,000
2. $60,000
3. $45.000
4. $36,000

please provide the process, thanks.