Intercompany inventory transactions

Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2018. 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 $200,000 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, 2019, the subsidiary recorded sales to the parent in the amount of $240,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent’s inventory at December 31, 2019. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2019:

Investor	Investee
Income statement:
Revenues	$4,800,000	$800,000
Income from Investee	209,600	0
Expenses	(3,200,000)	(480,000)
Net income	$1,809,600	$320,000
Retained earnings statement:
BOY retained earnings	$1,488,000	$80,000
Net income	1,809,600	320,000
Dividends declared	(128,000)	(80,000)
EOY retained earnings	$3,169,600	$320,000
Balance sheet:
Current assets	$1,600,000	$200,000
Investment in subsidiary	465,600	-
Noncurrent assets	8,000,000	600,000
Total assets	$10,065,600	$800,000
Liabilities	$5,296,000	$320,000
Common stock & APIC	1,600,000	160,000
Retained earnings	3,169,600	320,000
Total liabilities & stockholders’ equity	$10,065,600	$800,000

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

A)$1,782,000

B)$1,740,000

C)$1,800,000

D)$1,818,000