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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 2 years ago
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