Cineplex Corporation is a diversified company that operates in five different in

Question

Cineplex Corporation is a diversified company that operates in five different industries: A, B, C, D, and E. The following information relating to each segment is available for 2015.

A

B

C

D

E

Sales of segments B and C included intersegment sales of $24,420 and $102,960, respectively.

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

Reportable Segment

(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

A

B

C

D

E

Sales revenue $55,100 $76,200 $588,600 $37,200 $55,000 Cost of goods sold 20,500 51,300 277,000 20,500 32,800 Operating expenses 10,040 55,100 238,400 12,100 18,710     Total expenses 30,540 106,400 515,400 32,600 51,510 Operating profit (loss) $24,560 $(30,200) $73,200 $4,600 $3,490 Identifiable assets $35,800 $87,400 $507,100 $66,400 $51,300

Explanation / Answer

(a) Determination of reportable segments: 1. Revenue test: 10% x $812,100* = $81,210. Only Segment C ($588,600) meets this test. *55100+76200+588600+37200+55000 2. Operating profit test: 10% x ($24560- $30200+ $73200+ $4600+$3490) = $7565 3. Identifiable assets test: 10% x $766,6 00** = $76,660. Segments B ($87,700) and C ($505,200) meet this test. **$43,700+ $87,700+ $505,200+ $72,600+ $57,400 (b) Reconciliation of revenues Total segment revenues $811,300 Revenues of immaterial segments (87,900 ) Elimination of intersegment revenues (124,090 ) Revenues from reportable segments $599,310 Reconciliation of profit or loss Total segment operating profit $63,166 Profits of immaterial segments (5,310 ) Profits from reportable segments $57,856 Reconciliation of assets Total segment assets $766,600 Assets of immaterial segments (130,000 ) Assets from reportable segments $636,600

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