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ame date, Yanc- ed: Onlanuary L 2:, mheducationcom/flow/connecthtml Study Help Dash- View Document?Sokm )a.nt No enta Saved Help a Required information The following information applies to the questions displayed below) Following is financial information describing the six operating segments that make up Fairfield, Inc. (in thousands) Green Pink Black hite Sales to outside part1es Inter Begnen? revenues Salary expense Rent ex Interest expense Income tax expense (asvings) 11,834 635 $537 332 #144 1122 e5 20 637 335 164 110 (109) (07) Consider the following questions independently None of the sx segments has a primarily financial nature a. What minimum revenue amount must any one segment generate to be of significant size to require disaggregated disclosure (Enter your answer in dellars but not in thousands.) Next>Explanation / Answer
1. The minimum revenue any one segment must generate to be of significant size to require disaggregated disclosure is 10% of the total revenue and the total revenue includes intercompany/intersegment sales and transfers.
Total Revenue in the given case is, $ 4,453 thousand.
Therefore a segment should generate a minimum of $445.3 thousand to be a significant size to require disaggregated disclosure.
2. Yes, only Red, Blue and Green necessitate separate disclosure because they amount to 75% of consolidated revenues.
3. The minimum volume of revenues a single customer must generate to necessitate disclosing the existence of major customer is 10% of total revenue (total sales to outsiders) from him. In this case, the minimum volume is $380.4 thousand.
4. Combined operating profit of all segments that had a profit = $1,097 + $472 + $163 + $331 = $2,063
Combined operating loss of all segments that had a loss = $117 + $245 = $362.
If Segment's Profit or Loss > 10% of $2,063 (=$206.3)
In this case, Red, Blue, Black and White are to be reported.
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