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On January 1 2016 Halstead Inc purchased 75000 shares of Sedgwick Company common stock for $1480000 giving Halstead 25 percent ownership

On January 1, 2016, Halstead, Inc., purchased 75,000 shares of Sedgwick Company common stock for $1,480,000, 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 ............... $340,000 .................................... $120,000 2017 ................ 480,000 ....................................... 140,000 2018 ................ 600,000 ........................................ 160,000 On July 1, 2018, Halstead sells 12,000 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?

Apr 22 2020 View more View Less

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