Alpha Corporation owns 100 percent of Beta Company, and Beta owns 80 percent of Gamma, Inc., all of which are domestic corporations. Information for the three companies for the year ending December 31, 2011 follows:
-What is Beta's accrual-based income for 2011?
A) $200,000.
B) $276,800.
C) $280,000.
D) $296,000.
E) $300,000.

Question

Alpha Corporation owns 100 percent of Beta Company, and Beta owns 80 percent of Gamma, Inc., all of which are domestic corporations. Information for the three companies for the year ending December 31, 2011 follows: 
-What is Beta's accrual-based income for 2011?
A) $200,000. 
B) $276,800. 
C) $280,000. 
D) $296,000. 
E) $300,000.

Quizplus · Accepted Answer

Beta's accrual-based income for 2011 is $276,800. This is calculated by adding the net income of $200,000 to the depreciation expense of $76,800.

Alpha Corporation Owns 100 Percent of Beta Company, and Beta