BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
1 views

Segment Reporting (Appendix 5.1) Parks Conglomerate (Company does business in several different industries. The following is a 2016 condensed income statement for the entire company:

Parks has two major operating segments, A and B. No other operating segment contributes 10% or more of the company’s activities. Segments A and B make no sales to each other or to the other segments of the company. An analysis reveals that $2,000 of the total depreciation expense and $6,000 of the total other operating expenses are related to general corporate activities. The remaining expenses and total revenues are directly allocable to segment activities according to the following percentages:

Chapter 5, Problem 18E, Segment Reporting (Appendix 5.1) Parks Conglomerate (Company does business in several different

Required:

Prepare a schedule that reports on the revenues and profit of Segments A and B and the other operating segments of Parks. Reconcile these amounts with the related totals on the preceding income statement. Include notes summarizing the depreciation related to each operating segment and the computation of segment profits.

To determine

Prepare the schedule that reports on the revenues and profits of segments A, segment B, and other operating segments of Company P. Reconcile these amounts with the related totals on the previous income statement and include the notes that summarizing the depreciation of each segment and the calculations of segment profits.

Explanation

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income statement reflecting the consumption of economic benefits of long-term asset.

Segment reporting: Reporting the financial information of a particular segment is referred as segment reporting.

Prepare the schedule that reports on the revenues and profits of segments A, segment B, and other operating segments of Company P:

Company P
Industry Segment Financial Results
For the Year Ended December 31, 2018
 Reportable Operating SegmentsOther segmentsAll total results
ParticularsAB
Segment revenues$120,000$138,000$42,000$300,000
Segment profit (1)$37,120$33,800$7,080$78,000
Less: General corporate expenses   ($8,000)
Pre-tax income   $70,000

Table (1)

Working note 1: Compute the segment profits:

Company P
Workings for Segment Reporting
For the Year Ended December 31, 2018
 All Operating SegmentsSegment totals

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Revenue accounts normally have debit balances.

College Accounting, Chapters 1-27

How does IP spoofing support Internet crime?

Accounting Information Systems

List and discuss three key facts about economic fluctuations.

Principles of Economics (MindTap Course List)

Does interest rate parity imply that interest rates are the same in all countries?

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

BALANCE SHEET Which of the following actions are most likely to directly increase cash as shown on a firm's bal...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)