ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 13, Problem 13.2.5E
To determine
Introduction: When a company operates various businesses in various geographical areas or have different segments of one business in similar area, then segment reporting is mandatory as per ASC 280. In this, company has to report various segments income, expenses, assets, liabilities, etc.
To choose: The correct option
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Students have asked these similar questions
(J)
Selected sales and operating data for three divisions of different structural engineering firms are given as follows:
Division ADivision BDivision CSales$ 12,120,000$ 28,120,000$ 20,120,000Average operating assets$ 3,030,000$ 7,030,000$ 5,030,000Net operating income$ 496,920$ 449,920$ 503,000Minimum required rate of return7.00%7.50%10.00%Required:
1. Compute the margin, turnover, and return on investment (ROI) for each division.
2. Compute the residual income (loss) for each division.
3. Assume that each division is presented with an investment opportunity that would yield a 8% rate of return.
a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity?
b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity
Shaq Company operates with three segments: Louisiana, Orlando, and Los Angeles.Data regarding these segments is as follows:
LouisianaSegment
OrlandoSegment
Los AngelesSegment
Contribution to indirect expenses
$328,500
$207,600
$155,500
Assets directly used & identified with segment
$1,858,700
$1,410,000
$742,600
1. Calculate the return on investment for each segment. Rank them from highest to lowest. Round percent to 1 decimal place.
LouisianaSegment
OrlandoSegment
Los AngelesSegment
Segment Net Income
Investment base (assets)
ROI (%)
Rankings (1,2, or 3, where 1 is the best)
2. Assume the cost of capital is 14% for a segment. Calculate residual income for each segment. Rank them from highest to lowest. Round percent to 1 decimal place.
LouisianaSegment
OrlandoSegment
Los AngelesSegment
Segment Net Income
Investment base (assets)
Cost of Capital (%)
Minimum Income
Residual Income…
Zachary Company operates three segments Income statements for the segments imply that profitability could be improved if Segment
A were eliminated.
ZACHARY COMPANY
Income Statements for Year 2
Segment
Sales
Cost of goods sold
Sales commissions
Contribution margin
General fixed operating expenses (allocation of president's salary)
Advertising expense (specific to individual divisions)
Net income (loss)
Required
a. Prepare a schedule of relevant sales and costs for Segment A
A
$ 168,000
(126,000)
(20,000)
22,000
(34,000)
(6,000)
B
$ 235,000
(79,000)
(32,000)
124,000
(51,000)
(19,000)
$ (18,000)
$ 54,000
$ 253,000
(82,000)
(28,000)
143,000
(34,000)
$ 109,000
b. Prepare comparative income statements for the company as a whole under two alternatives (1) the retention of Segment A and (2)
the elimination of Segment A
Complete this question by entering your answers in the tabs below..
Required A Required B
Prepare a schedule of relevant sales and costs for Segment A.
Relevant Revenue and Cost…
Chapter 13 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 13 - Prob. 13.1QCh. 13 - Prob. 13.2QCh. 13 - What are the three 10 percent significance tests...Ch. 13 - Prob. 13.4QCh. 13 - A company has 10 industry segments, of which the...Ch. 13 - Prob. 13.6QCh. 13 - Prob. 13.7QCh. 13 - Prob. 13.8QCh. 13 - Prob. 13.9QCh. 13 - Prob. 13.10Q
Ch. 13 - Prob. 13.11QCh. 13 - Prob. 13.12QCh. 13 - Prob. 13.13QCh. 13 - Prob. 13.14QCh. 13 - Maness Company made a change in accounting for its...Ch. 13 - Prob. 13.1CCh. 13 - Prob. 13.2CCh. 13 - Prob. 13.3CCh. 13 - Prob. 13.7CCh. 13 - Prob. 13.8CCh. 13 - Prob. 13.9CCh. 13 - Reportable Segments Data for the seven operating...Ch. 13 - Prob. 13.2.1ECh. 13 - Prob. 13.2.2ECh. 13 - Prob. 13.2.3ECh. 13 - Prob. 13.2.4ECh. 13 - Prob. 13.2.5ECh. 13 - Prob. 13.2.6ECh. 13 - Prob. 13.2.7ECh. 13 - Prob. 13.2.8ECh. 13 - Prob. 13.2.9ECh. 13 - Prob. 13.2.10ECh. 13 - Prob. 13.2.11ECh. 13 - Prob. 13.3.1ECh. 13 - Prob. 13.3.2ECh. 13 - Multiple-Choice Questions on Interim Reporting...Ch. 13 - Prob. 13.3.4ECh. 13 - Prob. 13.3.5ECh. 13 - Prob. 13.3.6ECh. 13 - Prob. 13.3.7ECh. 13 - Prob. 13.3.8ECh. 13 - Prob. 13.3.9ECh. 13 - Prob. 13.3.10ECh. 13 - LIFO Liquidation During July, Laesch Company,...Ch. 13 - Inventory Write-Down and Recovery Cub Company, a...Ch. 13 - MutiniedChoice Questions on Income Taxes at...Ch. 13 - Prob. 13.6.2ECh. 13 - Prob. 13.6.3ECh. 13 - MutiniedChoice Questions on Income Taxes at...Ch. 13 - Prob. 13.6.5ECh. 13 - Prob. 13.6.6ECh. 13 - Prob. 13.7ECh. 13 - Prob. 13.8ECh. 13 - Prob. 13.9ECh. 13 - Prob. 13.10ECh. 13 - Prob. 13.11ECh. 13 - Prob. 13.12ECh. 13 - Prob. 13.13PCh. 13 - Prob. 13.14PCh. 13 - Interim Income Statement Chris Inc. has...Ch. 13 - Prob. 13.17PCh. 13 - Prob. 13.20PCh. 13 - Matching Terms Match the items in the left-hand...
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