REFERENCE: Ref.07_10
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 31,2009 follows:

-What is Beta's accrual-based income for 2009?

Question

REFERENCE: Ref.07_10
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 31,2009 follows:
 
-What is Beta's accrual-based income for 2009?

Quizplus · Accepted Answer

To calculate Beta's accrual-based income, we need to start with Beta's EBIT from the consolidated income statement, which is $320,000. We then subtract Beta's interest expense ($40,000) and taxes ($3,200). This gives us Beta's net income of $276,800. Therefore, the correct answer is (B) $276,800.

REFERENCE: Ref.07_10 Alpha Corporation Owns 100 Percent of Beta Company,and Beta Owns