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

question 20

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 the net income attributable to the noncontrolling interest in Gamma for 2021?

• A) $0.
• B) $9,600.
• C) $10,000.
• D) $19,200.
• E) $20,000.

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Definitions:

Bad Debts

Unrecoverable amounts from debtors that are considered losses after all recovery attempts have been exhausted.

Insurance Settlement

The payment made by an insurance company to a policyholder following a claim, intended to cover losses or damages incurred.

Note Balance

The remaining amount owed on a promissory note after payments have been made.

Refinancing

Replacing an old loan with a new loan, typically with better terms, such as a lower interest rate.