Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

21. On January 1, 2019, Halstead, Inc., purchased 75,000 shares of Sedgwick Company common stock for $1,480,000, giving Halstead 25 percent ownership and the

image text in transcribed

21. On January 1, 2019, Halstead, Inc., purchased 75,000 shares of Sedgwick Company common stock for $1,480,000, giving Halstead 25 percent ownership and the ability to apply significant influence over Sedgwick. Any excess of cost over book value acquired was attributed solely to goodwill. Sedgwick reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout these years. Dividends are declared and paid in the same period. 2019 2020 Net Income $340,000 Annual Cash Dividends (paid quarterly) $120,000 140,000 480,000 2021 600,000 160,000 On July 1, 2021, Halstead sells 12,000 shares of this investment for $25 per share, thus reducing its interest from 25 to 21 percent, but maintaining its significant influence. Determine the amounts that would appear on Halstead's 2021 income statement relating to its ownership and partial sale of its investment in Sedgwick's common stock.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Accounting Tools for Business Decision Making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

5th edition

9780470418239, 470239808, 9780470239803, 470418230, 978-1118128169

Students also viewed these Accounting questions

Question

What does stickiest refer to in regard to social media

Answered: 1 week ago

Question

What is an SKU? LO.1

Answered: 1 week ago