Kaye Company Acquired 100% of Fiore Company on January 1

question 110

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 initial value 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) $100 increase.
• E) $210 increase.

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Definitions:

Le Bon

Gustave Le Bon was a French social psychologist best known for his work on crowd psychology and the behavior of individuals in groups.

Primitive Behaviour

Refers to actions or reactions considered to be based on instinctual drives or early human development, sometimes seen as less sophisticated or unlearned.

Emergent Norm Theory

A theory that suggests norms or behavioral expectations develop spontaneously within a group in response to situational cues and contexts.

Idiosyncratic

Pertaining to traits or characteristics that are unique to an individual, often diverging from the norm or general expectations.