13.

A U.S. parent acquired all of the stock of an Italian subsidiary on January 1, 2023, for 1,500,000. The excess paid over book value was attributed to goodwill, which was impaired by 50,000 during 2023. The subsidiarys January 1 and December 31, 2023, trial balances are as follows, in euros:

	December 31, 2023 Dr (Cr)	January 1, 2023 Dr (Cr)
Cash, receivables	180,000	200,000
Inventories, at FIFO cost	500,000	400,000
Plant & equipment, net	1,300,000	1,600,000
Liabilities	(1,080,000)	(1,400,000)
Capital stock	(200,000)	(200,000)
Retained earnings, beginning	(600,000)	(600,000)
Dividends	100,000
Sales revenue	(4,000,000)
Cost of goods sold	2,300,000
Depreciation expense	300,000
Out-of-pocket expenses	1,200,000
	0	0

Sales, purchases, and recurring out-of-pocket expenses occurred evenly throughout the year. The subsidiarys beginning inventory for 2023 was purchased at the end of 2022. The subsidiary did not purchase any plant & equipment during 2023. Exchange rates ($/) are:

January 1, 2023	$1.15
Average for 2023	1.2
Rate when dividends declared	1.22
Rate when ending inventory purchased	1.24
December 31, 2023	1.25

When consolidating the subsidiarys trial balance accounts with those of the parent, if the subsidiarys functional currency is the euro, eliminating entry (R) debits goodwill in the amount of

Select one:

a. $780,000

c. $875,000

d. $812,500