Intercompany inventory transactions

Assume a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2021. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $104,000 and no recorded book value. On the date of acquisition, the patent had five years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2022, the subsidiary recorded sales to the parent in the amount of $124,800 On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parents inventory at December 31, 2022. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2022:

	Investor	Investee
Income statement:
Revenues	$2,496,000	$416,000
Income from Investee	108,992	-
Expenses	(2,080,000)	(249,600)
Net income	$524,992	$166,400
Statement of retained earnings:
Beginning retained earnings	$773,760	$41,600
Net income	524,992	166,400
Dividends declared	(66,560)	(41,600)
Ending retained earnings	$1,232,192	$166,400
Balance sheet:
Current assets	$832,000	$104,000
Equity investment	242,112	-
Noncurrent assets	4,160,000	312,000
Total assets	$5,234,112	$416,000
Liabilities	$3,169,920	$166,400
Common stock & APIC	832,000	83,200
Retained earnings	1,232,192	166,400
Total liabilities and equity	$5,234,112	$416,000

Based on this information, determine the balance for Current Assets:

Select one:

a. $936,000

b. $926,640

c. $945,360

d. $904,800