On January 1, 2019, Halstead, Inc., purchased 76,000 shares of Sedgwick Company common stock for $1,527,000, 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. Annual Cash Dividends (paid quarterly) $104,000 141,000 156,000 Net Income 2019 $417,000 2020 2021 571,000 613,000 On July 1, 2021, Halstead sells 12,160 shares of this investment for $29 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 2021 income statement relating to its ownership and partial sale of its investment in Sedgwick's common stock. (Round your intermediate calculations to the nearest whole number.)
On January 1, 2019, Halstead, Inc., purchased 76,000 shares of Sedgwick Company common stock for $1,527,000, 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. Annual Cash Dividends (paid quarterly) $104,000 141,000 156,000 Net Income 2019 $417,000 2020 2021 571,000 613,000 On July 1, 2021, Halstead sells 12,160 shares of this investment for $29 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 2021 income statement relating to its ownership and partial sale of its investment in Sedgwick's common stock. (Round your intermediate calculations to the nearest whole number.)
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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Transcribed Image Text:On January 1, 2019, Halstead, Inc., purchased 76,000 shares of Sedgwick Company common stock for $1,527,000, 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.
Annual Cash Dividends (paid
quarterly)
$104,000
Net Income
$417,000
571,000
613,000
2019
2020
141,000
2021
156,000
On July 1, 2021, Halstead sells 12,160 shares of this investment for $29 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 2021 income statement relating to its ownership and partial sale of its
investment in Sedgwick's common stock. (Round your intermediate calculations to the nearest whole number.)
As total income accrual (no unearned gains)
140,990
As
gain
on sale of shares
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