Kaye Company Acquired 100% of Fiore Company on January 1

question 109

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 equity 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) $280
• E) $480

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Definitions:

Long-Term Potentiation

An enduring increase in signal transmission between two neurons that results from stimulating them synchronously, believed to be a cellular mechanism for learning and memory.

Classically Conditioned Associations

Refers to the learning process that occurs when two stimuli are repeatedly paired together; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Cerebellum

is a part of the brain that plays a major role in motor control, balance, coordination, and fine-tuning of movements.

Semantic Memories

A type of long term memory involving the capacity to recall words, concepts, or numbers, which is essential for the use and understanding of language.