A parent sells $30,000,000 retail value of merchandise to its subsidiary during 2012. The subsidiary's beginning inventory for 2012 contains $1,000,000 in merchandise purchased from the parent, including a markup of $200,000. The subsidiary's ending inventory for 2012 contains $1,500,000 in merchandise purchased from the parent. The markup included in the ending inventory balance is $225,000. On the 2012 consolidation working paper, eliminations I:
a. reduce ending inventory by $200,000.
b. reduce beginning retained earnings by $225,000.
c. reduce cost of goods sold by $225,000.
d. increase the parent's investment account by $200,000.