On October 1, Company X Acquired for Cash All of the Outstanding

question 4

Multiple Choice

On October 1, Company X acquired for cash all of the outstanding common stock of Company Y. Both companies have a December 31 year-end and have been in business for many years. Consolidated net income for the year ended December 31 should include net income of

• A) Company X for3 months and Company Y for 3 months
• B) Company X for 12 months and Company Y for 3 months
• C) Company X for 12 months and Company Y for 12 months
• D) Company X for 12 months, but no income from Company Y until Company Y distributed a dividend

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