On 10/1/06, Plyco issued shares of its voting common stock in exchange for 100% of Slyco's outstanding common stock in a business combination appropriately accounted for under the purchase method. Both companies have a December 31 year-end. Selected information for each company follows:
Required:
a. Determine the parent's net income for 2006 under the equity method.
b. Determine the parent's net income for 2006 under the cost method.
c. Determine the consolidated net income for 2006.

Question

On 10/1/06, Plyco issued shares of its voting common stock in exchange for 100% of Slyco's outstanding common stock in a business combination appropriately accounted for under the purchase method. Both companies have a December 31 year-end. Selected information for each company follows:
  Required:
a. Determine the parent's net income for 2006 under the equity method.
b. Determine the parent's net income for 2006 under the cost method.
c. Determine the consolidated net income for 2006.

Quizplus · Accepted Answer

The Answer of On 10/1/06, Plyco issued shares of its voting common stock in exchange for 100% of Slyco's outstanding common stock in a business combination appropriately accounted for under the purchase method. Both companies have a December 31 year-end. Selected information for each company follows:
  Required:
a. Determine the parent's net income for 2006 under the equity method.
b. Determine the parent's net income for 2006 under the cost method.
c. Determine the consolidated net income for 2006.

On 10/1/06, Plyco Issued Shares of Its Voting Common Stock