Multiplex Inc., a public company whose stock is traded on a national stock excha
ID: 2391816 • Letter: M
Question
Multiplex Inc., a public company whose stock is traded on a national stock exchange, reported the following information on its consolidated financial statements for 20X5 From the consolidated income statement: Sales revenues Rental revenues Income before income taxes Income taxes $657,000,000 53,000,000 89,000,000 24,000,000 From the consolidated balance sheet: Total assets $672,000,000 Multiplex management determined that it had the following operating segments during 20X5: (1) car rental, (2) aerospace, (3) communications, (4) health and fitness products, and (5) heavy equipment manufacturing. The company assembled the following information for these industry segments for 20X5 (dollar amounts stated in millions) Health Fitness $ 50 Heavy $290 45 Communications $ 65 Equipment Item Sales Rentals Intersegment sales Cost of goods sold Selling expenses Other traceable expenses Allocation of common costs Assets Other information: Aerospace $251 Rental $ 54 13 138 82 12 181 20 240 20 21 15 60 147 110 120 Depreciation expense (included above) 65 80 Capital expenditures 70Explanation / Answer
Answer a. Multiplex Inc. Schedule for 10% Revenue Test For the Year Ended Dec 31, 20X5 (In Millions) Segment Segment Revenue Percent of Combined Revenue Reportable Segment Car Rental 67 8.72% No Aerospace 251 32.68% Yes Communications 65 8.46% No Health/Fitness 50 6.51% No Heavy Equipment 335 43.62% Yes Total 768 Multiplex Inc. Schedule for 10% Segment Profit or Loss Test For the Year Ended Dec 31, 20X5 (In Millions) Segment Segment Profit (Loss) Percent of Test Amount Reportable Segment Car Rental 33 24.09% Yes Aerospace 8 5.84% No Communications 36 26.28% Yes Health/Fitness 14 10.22% Yes Heavy Equipment 46 33.58% Yes Total 137 Calculation of Operating Profit: Car Rental Aerospace Communications Health/Fitness Heavy Equipment Revenue 67 251 65 50 335 Cost of Goods Sold (138) (181) Selling Expenses (20) (82) (8) (21) (77) Other Traceable Expenses (8) (12) (15) (9) (20) Allocation of Common Costs (6) (11) (6) (6) (11) Operating Profit 33 8 36 14 46 Multiplex Inc. Schedule for Segment Assets Test For the Year Ended Dec 31, 20X5 (In Millions) Segment Segment Assets Percent of Test Amount Reportable Segment Car Rental 60 8.86% No Aerospace 147 21.71% Yes Communications 110 16.25% Yes Health/Fitness 120 17.73% Yes Heavy Equipment 240 35.45% Yes Total 677 Answer b. Yes Answer c. Multiplex Operations Industry Segments (In Millions) Car Rental Aerospace Communications Health/Fitness Heavy Equipment Combined Sales to: Unaffiliated Customers 54 251 65 50 290 710 Intersegment Sales 13 45 58 Total Revenue 67 251 65 50 335 768 Depreciation 8 55 8 9 65 145 Segment Profit 33 8 36 14 46 137 Segment Assets 60 147 110 120 240 677 Expenditure for Segment Assets 7 70 55 80 212
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