Kaye Company Acquired 100% of Fiore Company on January 1

question 2

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 partial 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:

Loss of Bone Density

A condition characterized by a decrease in the density of bones, making them more fragile and susceptible to fractures, often associated with osteoporosis.

Lack of Weight Bearing

A condition or scenario where an individual or limb does not apply weight or stress to a certain area, potentially affecting bone and muscle health.

Subarachnoid Hemorrhage

A form of stroke caused by bleeding into the space surrounding the brain, often leading to sudden, severe headache, loss of consciousness, or neurological deficits.

Spontaneous Rupture

A sudden breakage or tearing of tissue or organ in the body without an obvious cause or external influence.