Question
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
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.
50. 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.
51. 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.
52. 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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