Assume That Parent Inc

question 26

Multiple Choice

Assume that Parent Inc. purchased a controlling interest in Sub Inc. on August 1, 2018 and decides to prepare an Income Statement for the combined entity on the date of acquisition. If Parent acquired 80% of Sub Inc. on that date, what would be the net income reported for the combined entity (for the year ended July 31, 2018) ?

• A) $104,000
• B) $120,000
• C) $130,000
• D)Nil

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Definitions:

Carbon Dioxide

A colorless gas with a density about 60% higher than that of dry air, contributing to the greenhouse effect and global warming.

Herbivore

An animal that feeds primarily on plants.

Plants

Multicellular organisms in the kingdom Plantae that photosynthesize, using sunlight to convert carbon dioxide and water into glucose and oxygen.