Problem:
Big Company owns 100 percent of the outstanding shares of Little. During the current year, Big sold inventory costing $90,000 to Little for $100,000. Although this inventory has now been sold to an outside party, Little has not repaid Big. At the balance sheet date, Big has total current assets of $800,000 whereas Little has total current assets of $500,000. Assume that there were no allocations established at the date of acquisition.
Required:
What is the total amount reported on the consolidated balance sheet for current assets?
Note: Explain all steps comprehensively.