On January 1, year 1, ABC Corp. purchased all of DEF Corp.'s common stock for $1,000,000. On that date, the fair values of DEFs assets and liabilities equaled their carrying amounts of $800,000 and $100,000, respectively. During year 1, DEF paid cash dividends of $20,000.Selected information from the separate balance sheets and income statements of ABC and DEF as of December 31, year 1, and for the year then ended follows:

ABC DEF

Balance sheet accounts

Investment in subsidiary $800,000

Retained earnings 1,000,000 500,000

Total stockholders' equity 3,000,000 1,500,000

Income statement accounts

Operating income 400,000 300,000

Equity in earnings of ABC 150,000

Net income 450,000 150,000

In ABC's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings?