Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help Highlight, Inc., owns all outstanding stock of Kiort Corporation. The two companies report the following balances for the year ending December 31, 2017:

image text in transcribedimage text in transcribed

please help

Highlight, Inc., owns all outstanding stock of Kiort Corporation. The two companies report the following balances for the year ending December 31, 2017: Highlight $(670,000) 540,000 (120,000) Kiort Revenues and interest income $ (390,000) 221,000 (32,000) Operating and interest expense Other gains and losses $(201,000) (250,000) Net income 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. Revenues and interest income Operating and interest expense Other gains and losses Net income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Ready Notes For Use With Managerial Accounting

Authors: Ronald W. Hilton

4th Edition

0073656518, 978-0073656519

More Books

Students also viewed these Accounting questions

Question

Define organisational structure

Answered: 1 week ago

Question

Define line and staff authority

Answered: 1 week ago

Question

Define the process of communication

Answered: 1 week ago

Question

Explain the importance of effective communication

Answered: 1 week ago

Question

* What is the importance of soil testing in civil engineering?

Answered: 1 week ago