Advanced Financial Accounting
Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
Question
Chapter 13, Problem 13.14P

a

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise wide disclosures in the financial statement to help users to understand risks and potential returns. ASC 280 established the term enterprise wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The segmental disclosure worksheet for C.

a

Expert Solution
Check Mark

Answer to Problem 13.14P

Segment profit or loss

    ApparelBuildingChemicalFurnitureMachinery
    $110,000$155,000$(5,000)$(13,000)$97,000

Explanation of Solution

1. Segment disclosure worksheet.

    Operating SegmentsCorporate admin $Intersegment eliminations $Consolidate $
    Apparel $Building $Chemical $Furniture $Machinery $Combined $
    Revenues:
    Sales:
    Non-affiliate870,000750,00055,00095,000180,0001,950,0001,950,000
    Intersegment.5,00015,000140,000160,000(160,000)
    Total revenue870,000750,00060,000110,000320,0002,110,000(160,000)1,950,000
    Expenses:
    Cost of goods sold(480,000)(450,000)(42,000)(78,000)(150,000)(1,200,000)160,000(1,040,000)
    Selling expenses(160,000)(40,000)(10,000)(20,000)(30,000)(260,000)(260,000)
    Traceable expenses(40,000)(30,000)(6,000)(12,000)(18,000)(106,000)(106,000)
    Allocated expenses(80,000)(75,000)(7,000)(13,000)(25,000)(200,000)(200,000)
    Segment profits110,000155,000(5,000)(13,000)97,000344,0000344,000
    Unallocated general expenses(35,000)(35,000)(35,000)
    Income before tax110,000155,000(5,000)(13,000)97,000(35,000)309,0000309,000
    Assets:
    Segments610,000560,00080,00090,000140,0001,480,0001,480,000
    General corporate125,000125,000125,000
    Total Assets610,000560,00080,00090,000140,000125,0001,605,0001,605,000

Allocated costs:

b

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in the financial statement to help users to understand risks and potential returns. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The schedule showing which segments are separately reportable.

b

Expert Solution
Check Mark

Answer to Problem 13.14P

Only Apparel and Building are separately reportable

Explanation of Solution

Schedule showing reportable segments

Segment is reportable if segment revenue is greater than or equal to 10 percent

    RevenueProfitAssets
    Segment$,(000’s)%Reportable$,(000’s)%Reportable$,(000’s)%Reportable
    Apparel87045Yes11032Yes61041Yes
    Building75038Yes15545Yes56038Yes
    Chemical553No(5)-1.5No805.4No
    Furniture955No(13)-4No906No
    Machinery1809No9728Yes1409.5No
    Total1,9501003441001,480100

Therefore, only Apparel and Building are separately reportable.

c

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in the financial statement to help users to understand risks and potential returns. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The information about company’s operations in different industry segments as required by ASC 280.

c

Expert Solution
Check Mark

Answer to Problem 13.14P

Segment profit

    ApparelBuildingMachineryOtherConsolidated
    $110,000$155,000$97,000$(18,000)$344,000

Explanation of Solution

    Operating Segments
    Apparel $Building $Machinery $Other $Elimination $Consolidated $
    Revenues:
    Sales:
    Non-affiliate870,000750,000180,000150,0001,950,000
    Intersegment.140,00020,000(160,000)
    Total revenue870,000750,000320,000170,000(160,000)1,950,000
    Expenses:
    Segment profits110,000155,00097,000(18,000)344,000
    Unallocated general expenses(35,000)
    309,000
    Assets:
    Segments610,000560,000140,000170,0001,480,000
    General corporate125,000
    Total Assets1,605,000
    Depreciation60,00050,00025,00021,000156,000
    Capital expenditure20,00030,00015,000065,000

c

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in the financial statement to help users to understand risks and potential returns. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The information about company’s operations in different industry segments as required by ASC 280.

c

Expert Solution
Check Mark

Answer to Problem 13.14P

Apparel, Building and Machinery can be considered as separately reportable, if building segment had $460,000 in assets instead of $560,000 and furniture segment had $190,000 instead of $90,000.

Explanation of Solution

    RevenueSegment ProfitSegment Assets
    Apparel$870,000$2,110,000=41.2%$110,000$362,000=30.4%$610,000$1,480,000=41,2%
    Building$750,000$2,110,000=35.6%$155,000$362,000=42.8%$460,000$1,480,000=31,1%
    Chemical$60,000$2,110,000=2.8%$5,000$362,000=1.4%$80,000$1,480,000=5.4%
    Furniture$110,000$2,110,000=5.2%$13,000$362,000=3,6%$190,000$1,480,000=12.8%
    Machinery$320,000$2,110,000=15.2%$97,000$362,000=26.8%$140,000$1,480,000=9.5%

Result of the 10 percent tests to determine if separately reportable:

    RevenueProfitAssets
    ApparelYesYesYes
    BuildingYesYesYes
    ChemicalNoNoNo
    FurnitureNoNoYes
    MachineryYesYesNo

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Chapter 13 Solutions

Advanced Financial Accounting

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