A Corporation had net income of $50,000 in 2018 and $60,000 in 2019, excluding any income from its investment in B Company. B Company had net income of $30,000 in 2018 and $40,000 in 2019. On January 1, 2019, 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 2018 in its comparative consolidated financial statements at the end of 2019?
A) $30,000
B) $50,000
C) $80,000
D)$100,000

Question

Quizplus · Accepted Answer

A Corporation did not have any income from its investment in B Company in 2018 as it did not own any shares of B Company during that year. Therefore, A Corporation's net income for 2018 was $50,000, excluding any income from its investment in B Company.

A Corporation Had Net Income of $50,000 in 2018 and $60,000