On March 31, 2013 a Parent Received $20,000 in Inventory

On March 31, 2013 a parent received $20,000 in inventory for cash from its subsidiary. The subsidiary made a profit of $5,000 on the sale. At year end, the parent had sold $15,000 of this inventory to third parties for $28,000. The closing balance of this inventory is $5,000. What is the combined adjustment to sales and cost of sales before tax?

A) $1,000
B) $1,250
C) $1,500
D) $2,000