On January 1, 2016, Halstead, Inc., purchased 71,000 shares of Sedgwick Company common stock for $1,392,000,...

On January 1, 2016, Halstead, Inc., purchased 71,000 shares of Sedgwick Company common stock for $1,392,000, 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)
2016	$406,000	$116,000
2017	547,000	122,000
2018	608,000	163,000

On July 1, 2018, Halstead sells 10,300 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 2018 income statement relating to its ownership and partial sale of its investment in Sedgwick's common stock


As total income accrual (no unearned gains)(. )
As( )		on sale of shares(. )

Solutions

Expert Solution

The table used to compute the desired result

End results would be:

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

On January 1, 2019, Halstead, Inc., purchased 71,000 shares of Sedgwick Company common stock for $1,485,000,...

On January 1, 2019, Halstead, Inc., purchased 71,000 shares of Sedgwick Company common stock for $1,485,000, 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 $407,000...

On January 1, 2016, Halstead, Inc., purchased 81,000 shares of Sedgwick Company common stock for $1,533,000,...

On January 1, 2016, Halstead, Inc., purchased 81,000 shares of Sedgwick Company common stock for $1,533,000, 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) 2016 $378,000...

On January 1, 2016, Tiger Company purchased 6,720 shares of Eagle Corporation’s common stock when Eagle...

On January 1, 2016, Tiger Company purchased 6,720 shares of Eagle Corporation’s common stock when Eagle had 22,400 shares outstanding. On that date, the following information pertained to Eagle: Eagle Corporation Balance Sheet January 1, 2016 Depreciable assets (remaining life, 8 years) Book Value $600,000.00 Fair Value $620,000.00 Other non-depreciable assets Book Value 290,000.00 Fair Value 300,000.00 Total Book Value $890,000.00 Fair Value $920,000.00 Liabilities Book Value $300,000.00 Fair Value $330,000.00 Shareholders’ equity Book value $590,000.00 Total $890,000.00 During 2016,...

On January 1, 2016, Tiger Company purchased 6,720 shares of Eagle Corporation’s common stock when Eagle...

On January 1, 2016, Tiger Company purchased 6,720 shares of Eagle Corporation’s common stock when Eagle had 22,400 shares outstanding. On that date, the following information pertained to Eagle: Eagle Corporation Balance Sheet January 1, 2016 Depreciable Assets (remaining life, 8 years) Book Value Fair Value $600,000.00 $620,000.00 Other non-depreciable assets 290,000.00 300,000.00 Total $890,000.00 $920,000.00 Liabilities $300,000.00 $330,000.00 Shareholders’ equity 590,000.00 Total $890,000.00 During 2016, Eagle earned net income of $120,000 and paid total dividends of $48,000. Required: Prepare...

On January 1, 2011, Perelli Company purchased 90,000 of the 100,000 outstanding shares of common stock...

On January 1, 2011, Perelli Company purchased 90,000 of the 100,000 outstanding shares of common stock of Singer Company as a long-term investment. The purchase price of $5,003,400 was paid in cash. At the purchase date, the balance sheet of Singer Company included the following: Current assets $2,904,100 Long-term assets 3,888,100 Other assets 764,000 Current liabilities 1,547,100 Common stock, $20 par value 2,001,400 Other contributed capital 1,888,600 Retained earnings 1,612,000 Additional data on Singer Company for the four years following...

A company (the investor) purchased 860 shares of the investee’s common stock for $107,000 on January...

A company (the investor) purchased 860 shares of the investee’s common stock for $107,000 on January 2, 2021. The investee had 2,000 outstanding shares. During 2021, the investee declared dividends of $56,000 and reported earnings for the year of $452,000. If the investor company uses the equity method of accounting for its investment in the investee, its Investment in the investee account at December 31, 2021 should be

Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2017, for...

Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2017, for $400,000. Trial balances at the end of 2017 for the companies were: Place Shaw Cash $ 80,350 $ 87,000 Accounts and Notes Receivable 200,000 210,000 Inventory, 1/1 70,000 50,000 Investment in Shaw, Inc. 400,000 —0— Plant Assets 300,000 200,000 Dividends Declared 35,000 22,000 Purchases 240,000 150,000 Selling Expenses 28,000 20,000 Other Expenses 15,000 13,000 $1,368,350 $752,000 Accounts and Notes Payable $ 99,110 $ 38,000...

Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2012, for...

Place Company purchased 92% of the common stock of Shaw, Inc. on January 1, 2012, for $402,800. Trial balances at the end of 2012 for the companies were: Place Shaw Cash $80,400 $86,400 Accounts and Notes Receivable 200,600 206,900 Inventory, 1/1 70,400 49,000 Investment in Shaw, Inc. 402,800 —0— Plant Assets 295,800 197,400 Dividends Declared 34,900 21,700 Purchases 238,100 149,200 Selling Expenses 27,700 20,000 Other Expenses 15,300 12,800 $1,366,000 $743,400 Accounts and Notes Payable $97,800 $37,700 Other Liabilities 45,600 15,100...

2. On January 1, 20X8, Ball Corporation purchased shares of Leftwich Company common Stock. a. Assume...

2. On January 1, 20X8, Ball Corporation purchased shares of Leftwich Company common Stock. a. Assume the stock acquired by Ball represents 15% of Leftwich’s voting stock and that Ball has no influence over Leftwich’s business decisions. Use the financial statement effects template (with amounts and accounts) to record the following transactions. i. Ball purchased 5,000 common shares of Leftwich at $15 cash per share. ii. Leftwich reported annual net income of $40,000. iii. Ball received a cash dividend of...

On January 1, 2016, A Corp. issued shares of its common stock to acquire all of...

On January 1, 2016, A Corp. issued shares of its common stock to acquire all of the outstanding common stock of B Inc. B’s book value was only $140,000 at the time, but A issued 12,000 shares having a par value of $1 per share and a fair value of $20 per share. A was willing to convey these shares because it felt that buildings (ten-year life) were undervalued on B's records by $60,000 while equipment (five-year life) was undervalued...

Subjects