On January 1, 2022, Halstead, Incorporated, purchased 73,000 shares of Sedgwick Company common stock for $1,418,000, 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. Year 2022 2023 Net Income $ 410,000 2024 Annual Cash Dividends (paid quarterly). $ 101,000 127,000 150,000 537,000 613,000 On July 1, 2024, Halstead sells 11,680 shares of this investment for $25 per share, thus reducing its interest from 25 to 21 percent, but maintaining its significant influence. Required: Determine the amounts that would appear on Halstead's 2024 income statement relating to its ownership and partial sale of its investment in Sedgwick's common stock. Total income accrual (no unearned gains) gain on sale of shares
On January 1, 2022, Halstead, Incorporated, purchased 73,000 shares of Sedgwick Company common stock for $1,418,000, 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. Year 2022 2023 Net Income $ 410,000 2024 Annual Cash Dividends (paid quarterly). $ 101,000 127,000 150,000 537,000 613,000 On July 1, 2024, Halstead sells 11,680 shares of this investment for $25 per share, thus reducing its interest from 25 to 21 percent, but maintaining its significant influence. Required: Determine the amounts that would appear on Halstead's 2024 income statement relating to its ownership and partial sale of its investment in Sedgwick's common stock. Total income accrual (no unearned gains) gain on sale of shares
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2022, Halstead, Incorporated, purchased 73,000 shares of Sedgwick Company common stock for $1,418,000, 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.
Year
2022
2023
Net Income
$ 410,000
2024
Annual Cash Dividends
(paid quarterly).
$ 101,000
127,000
150,000
537,000
613,000
On July 1, 2024, Halstead sells 11,680 shares of this investment for $25 per share, thus reducing its interest from 25 to 21 percent, but
maintaining its significant influence.
Required:
Determine the amounts that would appear on Halstead's 2024 income statement relating to its ownership and partial sale of its
investment in Sedgwick's common stock.
Total income accrual (no unearned gains)
gain
on sale of shares
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