A Corporation had net income of $50,000 in 2012 and $60,000 in 2013, excluding any income from its investment in B Company. B Company had net income of $30,000 in 2012 and $40,000 in 2013. On January 1, 2013, A Corporation acquired all of the outstanding common shares of B Company for a cash payment of $300,000. Assume that there was no acquisition differential on this business combination. What net income would A Corporation report for 2013 in its comparative consolidated financial statements at the end of 2013?
A) $40,000.
B) $60,000.
C) $80,000.
D) $100,000.

Question

Quizplus · Accepted Answer

A Corporation would report its own net income of $60,000 plus the net income of B Company from the date of acquisition, which is $40,000 for 2013. Therefore, the total consolidated net income for 2013 would be $100,000.

A Corporation Had Net Income of $50,000 in 2012 and $60,000