During 20X3, Park Corp. recorded $500,000 in sales of inventory to Small Co., its wholly owned subsidiary, on the same terms as sales made to third parties. At December 31, 20X3, Small held one-fifth of these goods in its inventory. The following information pertains to Park and Small's sales for 20X3. Park Small
Sales $2,000,000 $1,400,000
Cost of sales $800,000 $700,000
Gross profit $1,200,000 $700,000
In its 20X3 consolidated income statement, what amount should Park report as cost of sales?
a. $1,060,000
b. $1,100,000
c. $1,260,000
d. $1,500,000
a. $1,060,000

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This question seems like it should be quite hard although it reall just wants you to subtract.92-8.7=83.3