Kaye Company Acquired 100% of Fiore Company on January 1

question 99

Multiple Choice

Kaye Company acquired 100% of Fiore Company on January 1, 2021. Kaye paid $1,000 excess consideration over book value, which is being amortized at $20 per year. There was no goodwill in the combination. Fiore reported net income of $400 in 2021 and paid dividends of $100.Assume the initial value method is applied. How much equity income will Kaye report on its internal accounting records as a result of Fiore's operations?

• A) $400
• B) $300
• C) $380
• D) $100
• E) $210

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Definitions:

Bipolar Disorder

A mental disorder marked by alternating periods of elation and depression.

Bipolar Disorder

A mental health condition marked by extreme mood swings, including emotional highs (mania or hypomania) and lows (depression).

Mood Stabilize

The process of using medication or therapy to keep mood levels within a normal range, especially in individuals with mood disorders.

Manic Episodes

Periods of extremely elevated mood, energy, and activity levels that are characteristic of bipolar disorder.