Alpha Corporation Owns 100% of Beta Company, and Beta Owns

question 78

Multiple Choice

Alpha Corporation owns 100% of Beta Company, and Beta owns 80% of Gamma, Inc., all of which are domestic corporations. There were no excess allocation values at the date of acquisition of the subsidiaries. Information for the three companies for the year ending December 31, 2021 follows: What is Alpha's accrual-based net income for 2021?

• A) $564,000.
• B) $564,800.
• C) $572,200.
• D) $580,000.
• E) $600,000.

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Definitions:

Common Stock

Shares entitling their holder to dividends that vary in amount and may even be missed, depending on the fortunes of the company.

Journal Entry

A record that captures the financial impact of a business transaction in the accounting system.

Stock Issuance

The process of making new shares available for sale by a company, often to raise capital.

Credit To

An accounting entry that increases the balance of liabilities, equity, or revenue accounts, or decreases the balance of assets or expense accounts.