A subsidiary sells merchandise to its parent at a markup of 25%
on cost. In 2018, the parent paid $725,000 for merchandise received
from the subsidiary. By year-end 2018, the parent has sold $600,000
of the merchandise to outside customers for $900,000, but still
holds the other $125,000 in its ending inventory.

Which statement is false concerning the information related to
these merchandise sales, as reported on the 2018 consolidated
financial statements?

A. Eliminating entries entries on the 2018 working paper reduce
cost of goods sold by a net amount of $700,000.

B. Consolidated ending inventory is $125,000.

C. Consolidated cost of goods sold is $480,000.

D. Consolidated sales are $900,000.