A B C D E Sales revenue $40,600 $75,500 $571,400 $34,700 $56,000 Cost of goods s

Question

A
B
C
D
E
Sales revenue $40,600 $75,500 $571,400 $34,700 $56,000
Cost of goods sold 19,000 49,000 265,800 18,900 30,300
Operating expenses 9,900 39,800 231,800 12,300 17,900
    Total expenses 28,900 88,800 497,600 31,200 48,200
Operating profit (loss) $11,700 $(13,300) $73,800 $3,500 $7,800
Identifiable assets $35,500 $80,300 $499,500 $65,800 $49,400

Sales of segments B and C included intersegment sales of $20,100 and $100,400, respectively.

(a) Determine which of the segments are reportable based on the:

Reportable Segment
(1) Revenue test.
[Entry field with correct answer]

A
B
C
D
E
A and B
A and C
A and D
A, B and C
B and C
B and E
B, D and E
(2) Operating profit (loss) test.
[Entry field with correct answer]

A
B
C
D
E
A and B
A and C
A and D
A, B and C
B and C
B and E
B, D and E
(3) Identifiable assets test.
[Entry field with correct answer]

A
B
C
D
E
A and B
A and C
A and D
A, B and C
B and C
B and E
B, D and E

(b) Prepare the necessary disclosures required by GAAP. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

A
B
C
Other
Totals
External Revenues
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
Intersegment Revenues
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
Total Revenues
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
Cost of Goods Sold
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
Operating Expenses
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
Total Expenses
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
[Entry field with incorrect answer]
Operating Profit (Loss)
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
Identifiable Assets
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]
$
[Entry field with incorrect answer]

Explanation / Answer

A) Revenue Test - Segments will be reportable if that segment revenue is 10% or more of total revenue of the entity. However Total segemnt reporting should be 75% of total revenue hence we have to add additional segments if it does not get 75%

hence reportable segments will be Only B & C.

2) Operating profit loss test - In this test segments will be reportable if profit or loss of that segment is 10% or more of higher of

a) Total profit = (A+C+D+E) = 96800

b) Total loss (B) = 13300

That is 96800

Hence Reportable segments are A , B & C.

3) Identifiable asset test - Reportable if assets are more than 10% of total assets.

Hence reportable segments are B & C

B) Disclosures

Revenue

- External

- Internal

40600

NIL

55400

20100

471000

100400

90700

NIL

Segemt Sales/revenue % of Total Reportable? A 40600 5.21 No (< 10%) B 75500 9.70 Yes(to make 75%) C 571400 73.43 Yes ( > 10%) D 34700 4.46 No E 56000 7.20 No TOTAL 778200

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