On January 1, 2022, Halstead, Incorporated, 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. Year 2022 2023 2024 Net Income $ 378,000 573,000 602,000 Annual Cash Dividends (paid quarterly) $ 108,000 129,000 143,000 On July 1, 2024, Halstead sells 12,960 shares of this investment for $24 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) on sale of shares

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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On January 1, 2022, Halstead, Incorporated, 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.
Year
2022
2023
2024
Net Income
$ 378,000
573,000
602,000
Annual Cash Dividends
(paid quarterly)
$ 108,000
129,000
143,000
On July 1, 2024, Halstead sells 12,960 shares of this investment for $24 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)
on sale of shares
Transcribed Image Text:On January 1, 2022, Halstead, Incorporated, 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. Year 2022 2023 2024 Net Income $ 378,000 573,000 602,000 Annual Cash Dividends (paid quarterly) $ 108,000 129,000 143,000 On July 1, 2024, Halstead sells 12,960 shares of this investment for $24 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) on sale of shares
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