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.

13. 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.

14. 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.