_____ For 2006, Pyna reported $500,000 of net income from its own separate operations. This amount excludes income relating to Syna, its 80%-owned created subsidiary, which reported $100,000 of net income and declared $55,000 of dividends in 2006. What is the consolidated net income under the parent company concept?
A) $536,000
B) $544,000
C) $580,000
D) $600,000
E) $644,000

Question

Quizplus · Accepted Answer

Under the parent company concept, the consolidated net income includes the parent's net income and the parent's share of the subsidiary's net income. Pyna's net income is $500,000, and it owns 80% of Syna, so it includes 80% of Syna's $100,000 net income, which is $80,000. Therefore, the consolidated net income is $500,000 + $80,000 = $580,000.

_____ for 2006, Pyna Reported $500,000 of Net Income from Its