1. 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 2019 in its comparative consolidated financial statements at the end of 2020?

A. $80,000

B. $50,000

C. $30,000

D. $100,000

2. 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. $80,000

B. $100,000

C. $40,000

D. $60,000

3. A Inc. purchased 100% of the voting shares of B Inc. on July 1, 2019. Which of the following statements is TRUE?

A. The Consolidated Income Statement for 2019 will only include income from A Inc.

B. The 2019 Consolidated Income Statement will include income for both A Inc. and B Inc. for the entire year.

C. The 2018 Income Statement (i.e. the comparative year), will retroactively include income for both A Inc. and B Inc.

D. The 2019 Consolidated Income Statement will include only the income of A Inc. from January 1, 2019 to June 30, 2019 and income for both A Inc. and B Inc. from July 1, 2019 to December 31, 2019.