Kaye Company Acquired 100% of Fiore Company on January 1

question 89

Multiple Choice

Kaye Company acquired 100% of Fiore Company on January 1, 2011. Kaye paid $1,000 excess consideration over book value which is being amortized at $20 per year. Fiore reported net income of $400 in 2011 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:

Situational Leadership

A leadership style that proposes the effectiveness of a leader is determined by their ability to adapt their style to the demands of different situations.

Initiating Structure

A leadership behavior that involves organizing work, defining roles, and clearly stipulating tasks and procedures within a group or organization.

Initiating Structure

A leadership behavior that involves organizing work, defining role responsibilities, and setting clear patterns of organization and communication.

Supervisory Style

The manner in which a supervisor oversees, guides, and manages employees, which can range from authoritarian to democratic.