Question #4: (Marks: 10+5+3=18) A) On January 1, year 4, X Co. acquired all the common shares of Y Co. The condensed income statements for the two companies for Year 5, were as follows: Sales X Co. Y Co. 10,000,000 6,000,000 Gain on sale of equipment 240,000 Other income 800,000 50,000 Total Revenues 10,800,000 6,290,000 Depreciation expense 450,000 180,000 Income tax expense 6,600,000 4,300,000 Other expense 1,220,000 719,000 Total expenses 8,270,000 5,199,000 Net Income 2,530,000 1,091,000 7