A Corporation Had Net Income of $50,000 in 2019 and $60,000

question 27

Multiple Choice

A Corporation had net income of $50,000 in 2019 and $60,000 in 2020, excluding any income from its investment in B Company. B Company had net income of $30,000 in 2019 and $40,000 in 2020. On January 1, 2020, 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 2020 in its comparative consolidated financial statements at the end of 2020?

• A) $40,000
• B) $60,000
• C) $80,000
• D) $100,000

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, is able to elicit a conditioned response on its own.

Conditioned Response

A learned reaction to a conditioned stimulus that occurs because of previous conditioning.

Irrational Beliefs

Thoughts that are not based on reality or logic, often leading to negative emotional outcomes or unhealthy behaviors.

Abnormal Behavior

Actions, thoughts, or feelings that are considered to deviate significantly from what is considered normal in a society or culture.