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 the noncontrolling interest in Sigma's 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 the noncontrolling interest in Sigma's income for 2011?

Quizplus · Accepted Answer

To calculate the noncontrolling interest in Sigma's income, we need to first find Sigma's net income for 2011. From the information given in the table, Sigma's net income is $216,000 (total revenue of $600,000 minus total expenses of $384,000). 
Next, we need to find the portion of Sigma's net income that belongs to the noncontrolling interest (which is the portion owned by Pi, Inc.). Since Delta owns 90% of Sigma, this means the noncontrolling interest (owned by Pi) is 10% of Sigma's net income. 
Therefore, the noncontrolling interest in Sigma's income for 2011 is $21,600 (10% of $216,000). 
To get the final answer, we need to find the choice that matches this number. The only choice that does is C ($57,280), so the answer is C.

Delta Corporation Owns 90 Percent of Sigma Company, and Sigma