Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2019, Halstead, Inc., purchased 75,000 shares of Sedgwick Company common stock for $1,521,000, giving Halstead 25 percent ownership and the ability

image text in transcribedimage text in transcribed

On January 1, 2019, Halstead, Inc., purchased 75,000 shares of Sedgwick Company common stock for $1,521,000, 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. Net Income Annual Cash Dividends (paid quarterly) 2019 $364,000 $100,000 2020 486,000 2021 608,000 134,000 163,000 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 Return to same period. Net Income 2019 $364,000 2020 486,000 Annual Cash Dividends (paid quarterly) $100,000 134,000 2021 608,000 163,000 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. (Round your intermediate calculations to the nearest whole number.) Answer is complete but not entirely correct. As total income accrual (no unearned gains) $ 139,840 ( As gain i on sale of shares $ 300,000 Retur

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

Accounting

Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren

23rd Edition

978-0324662962

More Books

Students also viewed these Accounting questions

Question

What do you like to do in your spare time?

Answered: 1 week ago