Kaye Company Acquired 100% of Fiore Company on January 1

question 6

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 partial 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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