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  • Highlight Inc Owns All Outstanding Stock of Kiort Corporation The

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    Bube Kachevska
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    Highlight Inc owns all outstanding stock of its subsidiary Kiort Corporation. For the year ending December 31, 2017, Highlight reported revenues of $670,000, expenses of $540,000, and other losses of $120,000, for a net loss of $250,000. Kiort reported revenues of $390,000, expenses of $221,000, and other losses of $32,000, for a net loss of $201,000. Highlight also acquired $100,000 face value bonds originally issued by Kiort for $108,000, with an effective interest rate of 8%.

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    Highlight Inc Owns All Outstanding Stock of Kiort Corporation The

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    Highlight Inc owns all outstanding stock of its subsidiary Kiort Corporation. For the year ending December 31, 2017, Highlight reported revenues of $670,000, expenses of $540,000, and other losses of $120,000, for a net loss of $250,000. Kiort reported revenues of $390,000, expenses of $221,000, and other losses of $32,000, for a net loss of $201,000. Highlight also acquired $100,000 face value bonds originally issued by Kiort for $108,000, with an effective interest rate of 8%.

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    31 views1 page

    Highlight Inc Owns All Outstanding Stock of Kiort Corporation The

    Uploaded by

    Bube Kachevska
    Highlight Inc owns all outstanding stock of its subsidiary Kiort Corporation. For the year ending December 31, 2017, Highlight reported revenues of $670,000, expenses of $540,000, and other losses of $120,000, for a net loss of $250,000. Kiort reported revenues of $390,000, expenses of $221,000, and other losses of $32,000, for a net loss of $201,000. Highlight also acquired $100,000 face value bonds originally issued by Kiort for $108,000, with an effective interest rate of 8%.

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    © All Rights Reserved
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    Highlight Inc owns all outstanding stock of Kiort

    Corporation The #8115

    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)

    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.

    Highlight Inc owns all outstanding stock of Kiort Corporation The

    ANSWER
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