Delta Corporation owns 90 percent of Sigma Company, and Sigma owns 90 percent of Pi, Inc., all of which are domestic corporations. Information for the three companies for the year ending December 31, 2011 follows:
-What is Pi's accrual-based income for 2011?

Question

Delta Corporation owns 90 percent of Sigma Company, and Sigma owns 90 percent of Pi, Inc., all of which are domestic corporations. Information for the three companies for the year ending December 31, 2011 follows: 
-What is Pi's accrual-based income for 2011?

Quizplus · Accepted Answer

Accrual-based income is calculated by recognizing revenues when earned and expenses when incurred. The correct choice is $192,000, which reflects the income calculated on an accrual basis for 2011.

Delta Corporation Owns 90 Percent of Sigma Company, and Sigma