My 3 yr. old called an african american toddler a monkey. He wasn't being racial but the boys mom?

says we are bigots if our son says that. I am in NO WAY being racial but the boy was about 18 months old and my son saw him and said "mommy its a monkey!" he was so excited and I told him to hush and it was a little boy. He said NO MOMMY see its a monkey like on dunston. (he likes that movie dunston checks in). We were at my older son's tournament and her older son is on his team. I am so embarred and she is acting like I coached him to be a bigot. She said she has never been so insulted in her life. How can I smooth this over? She says I should beat his but in all honesty he is just a kid who doesn't know better.