Reference no: EM132600456

P Corporation owns 75% of the voting common stock of S Corporation, acquired at book value during 2001. Selected information from the accounts of Parent and Sub for 20X2 are as follows:

Sales                  $1,800,000

Parent                    $1,000,000

Sub Cost of Sales    980,000

Parent                   380,000 Sub

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 Sub's inventory at December 31, 20X2. Sub's December 31, 20X1 inventory included unrealized profit of $8,000 on goods acquired from Parent.

Question 1: What is consolidated cost of sales