Bobbi Kristina, 18, was in the lobby of the hotel around the time when Houston's body was pronounced dead at 3:55 p.m.
Houston was found partially submerged in the bathtub of her room, according to the source.
"[Bobbi Kristina] was screaming, 'What's wrong with her? What's wrong with her?," says the source.
According to police, a member of Houston's entourage first found Houston, 48.
Later that evening, at around 11 p.m., Bobbi Kristina was taken to Cedars Sinai Medical Center "because she was having a complete breakdown," adds the source.
Bobbi Kristina returned to Cedars around 10:30 a.m. on Sunday, according to multiple sources and police.
"She went back to the hospital for the same thing – stress and anxiety," says the family source. She was later cleared medically and released.