Mom owns $100\%$ of the capital stock of both Daughter Corp. and Son Corp. Daughter purchases merchandise inventory from Son at $140\%$ of Son's cost. During year $1,$ merchandise that cost Son $$40,000$ was sold to Daughter. Daughter sold all of this merchandise to unrelated customers for $$81,200$ during year $1.$ In preparing combined financial statements for year $1,$ Mom's bookkeeper disregarded the common ownership of Daugher and Son.

By what amount was unadjusted revenue overstated in the combined income statement for year $1?$

$$56,000$

$$16,000$

$$81,200$

$$40,000$