Parent Corporation owns 75% of the voting common stock of Sub Corporation, acquired at book value during 20X1. Selected information from the accounts of Parent and Sub for 20X2 are as follows:

	Parent	Sub
Sales	$1,800,000	$1,000,000
Cost of Sales	980,000	380,000

During 20X2, Parent sold merchandise to Sub for $100,000, at a gross profit to Parent of $40,000. Half of this merchandise remained in Subs inventory at December 31, 20X2. Subs December 31, 20X1 inventory included unrealized profit of $8,000 on goods acquired from Parent.

In a consolidated income statement for Parent Corporation and Subsidiary for the year 20X2, consolidated cost of sales should be:

Select one:

a. $1,372,000

b. $1,360,000

c. $1,272,000

d. $1,248,000