Find Corp. is a joint arrangement in which Seek Inc. has a $20\%$ interest. Although Find Corp. is an incorporated entity, it is accounted for as a joint operation. A contractual agreement gives Seek proportionate rights $(20\%)$ to all of Finds' assets and proportionate responsibilities $(20\%)$ for all of Find's liabilities.

The financial statements of both businesses as at December $31,2020,$ include the following information:

Seek Inc.

Find Corp.

INCOME STATEMENTS

Sales

$$800,000$

$$200,000$

Cost of Sales

$$400,000$

$$100,000$

Other Expenses

$$200,000$

$$60,000$

Net Income

$$200,000$

$$40,000$

BALANCE SHEETS

Miscellaneous Assets

$$600,000$

$$300,000$

Inventory

$$120,000$

$$60,000$

Investment in Find

$$180,000$

Total Assets

$$900,000$

$$360,000$

Miscellaneous Liabilities

$$160,000$

$$80,000$

Common Shares

$$200,000$

$$100,000$

Retained Earnings, Jan $1$

$$340,000$

$$140,000$

Net Income

$$200,000$

$$40,000$

Total Liabilities & Equity

$$900,000$

$$360,000$

During $2020,$ Seek sold merchandise totaling $$120,000$ to Find and recorded a gross profit of $50\%$ on these sales. At the end of $2020,$ Find's inventory contained $$30,000$ worth of merchandise purchased from Seek. Find also owed $$50,000$ to Seek at the end of $2020.$

Both companies are subject to a $40\%$ tax rate.

What is the total amount of cost of sales that would appear on Seek's $2020$ Income Statement?

Question $4$ options:

$$399,000$

$$420,000$

$$500,000$

$$396,000$