Question
In: Accounting
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
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Solutions
Expert Solution
The table used to compute the desired result
End results would be:
ekkarill92 answered 1 year agoRelated 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...
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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
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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
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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...
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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
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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
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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...
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