A subsidiary sells merchandise to its parent at a markup of 25% on cost. In 2013, the parent paid $500,000 for merchandise received from the subsidiary. By year-end 2013, the parent has sold $400,000 of the merchandise to outside customers for $450,000, but still holds the other $100,000 in its ending inventory. Which statement is true concerning how this information should be reported on the 2013 consolidated financial statements?
a. Consolidated sales should be $450,000
b. The consolidated ending inventory balance should be $100,000
c. Consolidated cost of goods sold should be $400,000
d. Consolidated cost of goods sold should be $720,000