I agree it sounds ihr instead of Er .Zu komplitziert However you can pay attention to the verb conjugation . Thsi can give you important clues to decide what the better answer is.
When you can't tell what the subject is, listen for how the verb is conjugated to tell you what the subject in the sentence is. I'm in French 2 at my high school and that is what has saved me from getting a lot of answers wrong on the listening comprehension part of a test many times. Works for German too, I guess.
For this verb, the conjugation is 'er/sie/es mog'. 'Mogst' is used for 'du', ie 'Du mogst Wasser"
In English, we can say "I'd like water" when the waitstaff asks what we'll have to drink. Can you do the same thing in German, or does it only refer to enjoying/being fond of water instead of wanting it?