1. A subsidiary sells merchandise to its parent at a markup of 30% on cost. In the current year, the parent paid $1,170,000 for merchandise received from the subsidiary. By year-end, the parent has sold $975,000 of the merchandise to outside customers for $1,200,000, but still holds the other $195,000 in its ending inventory. The parent did not have any merchandise purchased from the subsidiary in its beginning inventory. Which statement is true concerning how the above information is reported on the consolidated financial statements for the current year? A. Consolidated cost of goods sold should be $750,000. B. Consolidated cost of goods sold should be $975,000. C. Consolidated sales should be $1,170,000. D. The consolidated ending inventory balance should be $195,000.