On January 1, 2011, Owen Corp. purchased all of Sharp Corp.s common stock for $1,200,000. On that date, the fair values of Sharps assets and liabilities equaled their carrying amounts of $1,320,000 and $320,000, respectively. During 2011, Sharp paid cash dividends of $20,000.

Selected information from the separate balance sheets and income statements of Owen and Sharp as of December 31, 2011, and for the year then ended follows:

Owen Sharp Balance sheet accounts Investment in subsidiary $1,320,000 Retained earnings 1,240,000 560,000 Total stockholders equity 2,620,000 1,120,000 Income statement accounts Operating income 420,000 200,000 Equity in earnings of Sharp 140,000 Net income 400,000 140,000 In Owens December 31, 2011 consolidated balance sheet, what amount should be reported as total retained earnings? Please provide detailed calculation.

a. $1,240,000

b. $1,360,000

c. $1,380,000

d. $1,800,000

e. $1,900,000