During Year 3 Park Corp. recorded $500,000 in sales of inventory to Small Co., its wholly owned subsidiary, using the same gross profit rates as made to third parties. On December 31, Year 3, Small held one-fifth of these goods in its inventory. The following information pertains to Park and Small's sales for Year 3.

	Park	Small
Sales	$2,000,000	$1,400,000
Cost of sales	(800,000)	(700,000)
Gross profit	$1,200,000	$700,000

In its Year 3 consolidated income statement, what amount should Park report as cost of sales?

A.

$1,000,000

B.

$1,060,000

C.

$1,100,000

D.

$1,500,000