Kaye Company Acquired 100% of Fiore Company on January 1

question 50

Multiple Choice

Kaye Company acquired 100% of Fiore Company on January 1, 2013. Kaye paid $1,000 excess consideration over book value which is being amortized at $20 per year. Fiore reported net income of $400 in 2013 and paid dividends of $100.
Assume the equity method is applied. How much will Kaye's income increase or decrease as a result of Fiore's operations?

• A) $400 increase.
• B) $300 increase.
• C) $380 increase.
• D) $280 increase.
• E) $480 increase.

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Definitions:

Neurons

Specialized cells within the nervous system that transmit information to other nerve cells, muscle, or gland cells.

Brain

The complex organ located in the skull, responsible for controlling most functions of the body and mind, including thought, memory, emotion, and motor skills.

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A phase of sleep that serves as a bridge between wakefulness and deeper stages of sleep, often characterized by light sleep.

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