Highlight, Inc., owns all outstanding stock of Kiort Corporation. The two companies report the following balances for the year ending December 31, 2011:

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)

a. December 31, 2010?

b. December 31, 2012?