Par Corporation owns 80 percent of Sit’s common stock. During 2011, Par sold Sit $750,000 of inventory on the same terms as sales made to third parties. Sit sold 100 percent of the inventory purchased from Par in 2011. The following information pertains to Sit’s and Par’s sales for 2011:
|
Par |
Sit |
|
|
Sales |
$3,000,000 |
$2,100,000 |
|
Cost of Sales |
1,200,000 |
1,050,000 |
|
$1,800,000 |
$1,050,000 |
What amount should Par report as cost of sales in its 2011 consolidated income statement?
a $2,250,000
b $2,040,000
c $1,500,000
d $1,290,000