Advanced Accounting 14th Edition
14th Edition
ISBN: 9781260726442
Author: By Joe Ben Hoyle And Thomas Schaefer And Timothy Doupnik
Publisher: Mc Grawhill Education
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Question
Chapter 8, Problem 35P
To determine
Perform testing procedures to determine company E’s reportable operating segments.
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Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance.
It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows:
(see screen shot)
Ecru does not allocate its $1,480,000 in common expenses to the various segments.
Perform testing procedures to determine Ecru’s reportable operating segments.
Revenue test:
Profit or loss test:
Asset test:
Chevalier Company has identified five industry segments: plastics, metals, lumber, paper, and finance.
It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each
segment (in thousands) follows:
Accounts
Sales to outside parties
Intersegment sales
Interest income from outside parties
Interest income from intersegment loans
Operating expenses
Interest expense
Tangible assets
Intangible assets
Intersegment loans (debt)
Plastics
$ 6,694
Metals
$ 2,354
Lumber
$ 711
148
173
138
Paper
$ 422
150
Finance
$ 0
0
0
34
21
0
42
0
0
0
0
201
4,214
76
1,762
1,066
654
31
31
66
28
102
1,501
87
3,196
524
771
179
0
403
0
0
63
0
0
0
706
Chevalier does not allocate its $1,460,000 in common expenses to the various segments.
Required:
a1. Perform revenue test procedure to determine Chevalier's reportable operating segments.
a2. Perform profit or loss test procedure to determine Chevalier's reportable operating segments.
a3. Perform asset test…
Vehicle Corporation is organized into four operating segments. The internal reporting system generated the following segment information:The company incurred additional operating expenses (of a general nature) of $1,200,000. Perform the profit or loss test to determine which of these segments is separately reportable.
Chapter 8 Solutions
Advanced Accounting 14th Edition
Ch. 8 - Prob. 1QCh. 8 - Prob. 2QCh. 8 - Prob. 3QCh. 8 - The management approach requires a firm to define...Ch. 8 - What is an operating segment?Ch. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - Prob. 8QCh. 8 - Prob. 9QCh. 8 - Prob. 10Q
Ch. 8 - Prob. 11QCh. 8 - To satisfy geographic area disclosure...Ch. 8 - Prob. 13QCh. 8 - Prob. 14QCh. 8 - Prob. 15QCh. 8 - Prob. 16QCh. 8 - Prob. 17QCh. 8 - How does a company determine the amount of income...Ch. 8 - Prob. 19QCh. 8 - Prob. 20QCh. 8 - What type of segment information must companies...Ch. 8 - How would an annual bonus paid at year-end be...Ch. 8 - Which of the following does U.S. GAAP not consider...Ch. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Which of the following is not necessarily true for...Ch. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Which of the following items is required to be...Ch. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Which of the following information items with...Ch. 8 - Prob. 14PCh. 8 - In considering interim financial reporting, how...Ch. 8 - How should material seasonal variations in revenue...Ch. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Niceville Company pays property taxes of 100,000...Ch. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Noventis Corporation prepared the following...
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- Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows: Sales to outside parties Intersegment transfers Interest income from outside parties Interest income from intersegment loans Operating expenses Interest expense Tangible assets Intangible assets Intersegment loans (debt.) Plastics $6,870 a. Revenue test: 163 0 0 4,354 83 1,567 94 Metals $2,419 186 41 0 1,832 38 3,261 416 0 Lumber $ 746 151 28 0 1,136 73 589 0 0 Ecru does not allocate its $1,360,000 in common expenses to the various segments. " Perform testing procedures to determine Ecru's reportable operating segments. Paper Finance $ 457 $0 163 0 0 689 20 836 70 0 0 49 214 38 109 214 0 719arrow_forwardEcru Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows: Sales to outside parties Intersegment transfers Interest income from outside parties Interest income from intersegment loans Operating expenses Interest expense Tangible assets Intangible assets Intersegment loans (debt) Plastics $6,855 163 a. Revenue test: b. Profit or loss test: c. Asset test: 0 0 4,334 82 1,577 93 0 Metals $2,414 185 40 0 1,822 37 3,256 415 0 Lumber $ 741 150 27 0 1, 126 72 584 0 0 Ecru does not allocate its $1,400,000 in common expenses to the various segments. Perform testing procedures to determine Ecru's reportable operating segments. Paper Finance $ 452 162 0 0 684 22 831 69 0 0 48 213 37 108 209 0 718arrow_forwardWestinghouse Electric CorporationThe following note appears in the “Summary of Significant Accounting Policies” section of the Annual Report of Westinghouse Electric Corporation. Note 1 (in part): Revenue Recognition. Sales are primarily recorded as products are shipped and services are rendered. The percentage-of-completion method of accounting is used for nuclear steam supply system orders with delivery schedules generally in excess of five years and for certain construction projects where this method of accounting is consistent with industry practice. WFSI revenues are generally recognized on the accrual method. When accounts become delinquent for more than two payment periods, usually 60 days, income is recognized only as payments are received. Such delinquent accounts for which no payments are received in the current month, and other accounts on which income is not being recognized because the receipt of either principal or interest is questionable, are classified as nonearning…arrow_forward
- Lechon Company provided the following data for the current year: Sales Cost of goods sold Expenses Depreciation Income tax expense The entity has two major reportable segments, A and B. An analysis revealed that P1,000,000 of the total depreciation expense and P2,000,000 of the expenses are related to general corporate activities. The remaining expenses and sales are directly allocable to segment activities according to the following percentages: Sales Cost of goods sold Expenses Depreciation P60,000,000 28,000,000 14,000,000 4,000,000 4,000,000 Segment A 40% 35 40 40 Segment B 45% Others 15% 15 20 15 50 40 45 What amount should be reported as net income of Segment A?arrow_forwardWWK Company and its divisions are engaged solely in manufacturing. The entity reported the operating profit or loss of its divisions at Segment A P20,000,000 profit, Segment B P10,000,000 loss, Segment C P6,000,000 loss, Segment D P9,000,0000 loss, and Segment E P2,000,000 profit. What is the minimum operating profit or loss for a segment to be classified as reportable segment?arrow_forwardCompany A and its divisions are engaged solely in manufacturing operations. The following data pertain to the industries in which operations were conducted for the year ended December 31, 2019. Industry Revenue Profit Assets Red 8,000,000 (1,320,000) 16,000,000 Orange 6,400,000 920,000 14,000,000 460,000 10,000,000 Yellow 4,800,000 2,200,000 (420,000) 5,300,000 Green (240,000) 5,600,000 Blue 3,400,000 180,000 2,400,000 Purple 1,200,000 Calculate the materiality threshold that would be used under the profit or loss test to determine which segments are reportable.arrow_forward
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