Highlight Kiort Revenues and interest income.. Operating and interest expense Other gains and losses . Net income.. $(670,000) 540,000 $(390,000) 221,000 _(120,000) $(250,000) (32,000) $(201,000)
Highlight Kiort Revenues and interest income.. Operating and interest expense Other gains and losses . Net income.. $(670,000) 540,000 $(390,000) 221,000 _(120,000) $(250,000) (32,000) $(201,000)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Highlight, Inc., owns all outstanding stock of Kiort Corporation. The two companies report the following balances for the year ending December 31, 2017:
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 carrying amount of $84,000 (based on an effective rate of 11 percent). Determine the balances that should appear on a consolidated income statement for 2017.
Transcribed Image Text:Highlight
Kiort
Revenues and interest income..
Operating and interest expense
Other gains and losses .
Net income..
$(670,000)
540,000
$(390,000)
221,000
_(120,000)
$(250,000)
(32,000)
$(201,000)
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