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

---

Definitions:

Social Networking Site

An online platform that allows users to create a public profile, interact with real-life friends and meet other people based on shared interests.

LinkedIn

A professional networking site that allows individuals to connect, share their professional experiences, and find job opportunities.

Firefox

A free and open-source web browser developed by the Mozilla Foundation, known for its speed, security, and customizability.

Memos

Short written messages typically used within an organization to communicate policies, procedures, or official business.