At the date of acquisition, a subsidiary's inventory (FIFO, sold in the year of acquisition) is overvalued by $600, its plant assets (10-year life, straight-line) are overvalued by $4,000, and it has previously unreported intangibles valued at $1,000 (2-year life, straight-line). Goodwill from the acquisition is not impaired. In the second year following acquisition, the subsidiary reports net income of $2,000.

Using the complete equity method, in the second year the parent reports equity in the net income of the subsidiary of

Select one:

A. $1,100

B. $1,900

C. $1,300

D. $500