On January 1, 2012, the merchandise inventory of Glaus. Inc. was $1,000,000. During 2012 Glaus purchased $2,000,000 of merchandise and recorded sales of $2,500,000. The gross profit rate on these sales was 25%. What is the merchandise inventory of Glaus at December 31,2012?
A) $500,000
B) $625,000
C) $1,125,000
D) $1875,000