ighlight, Inc., owns all outstanding stock of Kiort Corporation. The two companies report the following balances for the year ending December 31, 2017:
Highlight, Inc., owns all outstanding stock of Kiort Corporation. The two companies report the following balances for the year ending December 31, 2017:
| Highlight | Kiort | ||||||
| Revenues and interest income | $ | (670,000 | ) | $ | (390,000 | ) | |
| Operating and interest expense | 540,000 | 221,000 | |||||
| Other gains and losses | (120,000 | ) | (32,000 | ) | |||
| Net income | $ | (250,000 | ) | $ | (201,000 | ) | |
Note: Parentheses indicate a credit balance.
On January 1, 2017, Highlight acquired on the open market bonds for $108,000 originally issued by Kiort. This investment had an effective rate of 8 percent. The bonds had a face value of $100,000 and a cash interest rate of 9 percent. At the date of acquisition, these bonds were shown as liabilities by Kiort with a book value of $84,000 (based on an effective rate of 11 percent).
Determine the balances that should appear on a consolidated income statement for 2017.
Revenue and Interest Income
Expense and Interest Expense
Gain or Loss
Net Income
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ighlight, Inc., owns all outstanding stock of Kiort Corporation. The two companies report the following balances for the year ending December 31, 2017:
Highlight, Inc., owns all outstanding stock of Kiort Corporation. The two companies report the following balances for the year ending December 31, 2017:
Highlight, Inc., owns all outstanding stock of Kiort Corporation. The two companies report the following balances for the year ending December 31, 2017: HighlightKiortRevenues and interest income$(670,000)$(390,000)Operating and interest expense540,000221,000Other gains and losses(120,000)(32,000)Net income$(250,000)$(201,000)Note: Parentheses indicate a credit balance. On January 1, 2017, Highlight acquired on the open market bonds for $108,000 originally issued by Kiort. This investment had an effective rate of 8 percent. The bonds had a face value of $100,000 and a cash interest rate of 9 percent. At...
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