SMch15Beams

Chapter 15

SEGMENT AND INTERIM FINANCIAL FINANCIAL REPORTING Answers to Questions 1

An operating segment is a component of an enterprise: (! t"at engages in #$siness acti%ities from from &"ic" &"ic" it ma' earn re%en$es re%en$es an inc$r inc$r e)pens e)penses* es* eit"er interna+ interna+ or e)terna+, e)terna+, (-! &"ose &"ose operating res$+ts are reg$+ar+' re%ie&e #' t"e enterprise.s c"ief operating ecision ma/er an (0! for &"ic" iscrete financia+ information is a%ai+a#+e1

2

A reporta#+e segment is an operating operating segment* eit"er sing+e si ng+e or aggregate* for &"ic" information "as to #e reporte $ner FASB ASC Topic 280 1 An operating segment is a reporta#+e segment if (a! its re%en$e is 2 percent or more of t"e com#ine re%en$e of a++ operating segments* (#! its a#so+$te operating profit or +oss is 2 percent or more of t"e greater of com#ine com#ine operating profit of a++ segments t"at "a%e operating profit or com#ine operating +osses of a++ segments t"at "a%e +osses* or (c! its ientifia#+e assets are 2 percent or more of t"e com#ine ientifia#+e assets of a++ operating segments1

3

Segments not meeting one of t"ese tests are s$#3ect to a ree%a+$ation* an possi#+e aggregation* if t"e com#ine re%en$e from sa+es to e)terna+ c$stomers of a++ reporta#+e segments is +ess t"an 45 percent of conso+iate re%en$e1 Segments t"at are not reporta#+e segments are com#ine &it" ot"er #$siness acti%ities an reporte $ner an 6a++ ot"er7 categor'1

4

T"e 2 percent re%en$e test app+ies to t"e 892*2221 Re%en$e for p$rposes of FASB ASC Topic 280 inc+$es re%en$e from #ot" e)terna+ an intersegment c$stomers1

5

An in$str' segment is a reporta#+e segment $ner t"e 2 percent operating profit test if its operating profit or +oss* in a#so+$te amo$nt* e;$a+s or is greater t"an t"e greater of com#ine operating profits for a++ operating segments "a%ing operating profits or t"e a#so+$te %a+$e of t"e com#ine operating +osses for a++ operating segments "a%ing operating +osses1

6

A segment is a reporta#+e segment $ner t"e 2 percent asset test if its assets are 2 percent or more of t"e com#ine assets of a++ operating segments1 T"e a++ocation of genera+ corporate assets epens on t"e interna+ operations of t"e enterprise1 T"e /e' is t"e asset fig$re gi%en gi%en to t"e c"ief operating operating ecision ecision ma/er on &"ic" "e or s"e e%a+$ates performance performance11 If corporate corporate assets are not a++ocate* t"e' #ecome part of t"e reconci+iation #et&een t"e reporta#+e segments. assets an conso+iate assets1

7

A segment is a reporta#+e segment $ner t"e 2 percent re%en$e test if its intersegment an e)terna+ sa+es is 2 percent or more of t"e com#ine intersegment an e)terna+ sa+es of a++ t"e operating segments1

8

No1 If t"e com#ine re%en$e from sa+es to e)terna+ c$stomers is +ess t"an 45 percent of tota+ conso+iate re%en$es* aitiona+ operating segments m$st #e ientifie as reporta#+e segments $nti+ t"e 45 percent test is met1 Eit"er some of t"e remaining segments m$st #e aggregate* if t"e' meet t"e aggregation aggregation criteria* criteria* so t"at t"e com#ine com#ine segment meets t"e materia+it' criteria of 2<* or one or more of t"e fi%e operating segments t"at &ere not reporta#+e segments $ner t"e 2 percent tests m$st #e ientifie as reporta#+e segments1

15-2

Segment and Interim Financial Reporting

9

T"e fo++o&ing information m$st #e isc+ose for reporta#+e segments an for t"e remainer of t"e enterprise.s operating segments an ot"er #$siness acti%ities in t"e aggregate: Re%en$e* Re%en$e* &it" separate separate amo$nts to $naffi+iate an affi+iate affi+iate c$stomers* c$stomers* an isc+os$re a of t"e #asis of acco$nting for intersegment sa+es1 Operatin Operating g profit profit or +oss* +oss* #ase #ase on t"e informati information on re%ie& re%ie&e e #' t"e c"ief c"ief operating operating b officer1 Ientifia#+e assets for eac" reporta#+e segment1 c Interest re%en$e d Interest e)pense e Aggregate amo$nt of epreciation* ep+etion* an amorti=ation e)pense1 f >n$s$a+ items as escri#e in paragrap" -? of AP@ Opinion No1 021 g E;$it' in t"e net income of in%estees acco$nte for #' t"e e;$it' met"o1 h Income ta) e)pense or #enefit1 i E)traorinar' items1 j Significant noncas" items ot"er t"an epreciation* ep+etion* an amorti=ation1 k

1

If t"e enterprise is segmente on a geograp"ic #asis* comp+ete segment information &o$+ #e s$pp+ie #' co$ntr' of operation1 If a ifferent criteria is $se for segmentation* more +imite geograp"ic information is s$pp+ie1 Re%en$es an +ong +i%e assets attri#$te to t"e co$ntr' of omici+e an a++ foreign operations are isc+ose1 An' sing+e co$ntr' &it" materia+ operations m$st a+so #e isc+ose separate+'1

11

T"e fact of an t"e amo$nt of re%en$e from eac" c$stomer m$st #e isc+ose if 2 percent or more more of an enterpr enterprise. ise.ss re%en re%en$e $e is eri%e eri%e from from t"at c$stomer c$stomer11 If 2 percen percentt or more more of an enterpr enterprise. ise.ss re%en$ re%en$ee is eri%e eri%e  from from sa+es sa+es to t"e feer feera+ a+ go%er go%ernment nment** or to a state* state* +oca+* +oca+* or foreign go%ernmenta+ $nit* t"at fact an t"e amo$nt of re%en$e m$st #e isc+ose1 T"e ientit' of t"e segment ma/ing s$c" sa+es m$st #e isc+ose* #$t t"e c$stomer nee not #e ientifie #' name1

12

T"e re;$irements of FASB FASB ASC Topic 280 o app+' to interim financia+ statements1 Li/e ot"er aspects aspects of interim reporting* segment isc+os$re isc+os$re is more +imite in t"e interim reports t"an in t"e ann$a+ reports1 Re;$ire isc+os$re for eac" reporta#+e segment in t"e interim reports inc+$e: (! re%en$es from e)terna+ c$stomers* (-! intersegment re%en$es* (0! a meas$re of segment profit or +oss* (9! tota+ assets for &"ic" t"ere "as #een a materia+ c"ange since t"e amo$nt isc+ose isc+ose in t"e ann$a+ report* (5! a escription of an' c"anges in t"e #asis for segmentation or t"e #asis of meas$rement meas$rement of segment profit or +oss* (?! a reconci+iation reconci+iation of tota+ reporta#+e segment segment profit profit or +oss an conso+iate income #efore income ta)es1

13

An ann$a+ effecti%e ta) rate is comp$te as t"e s$m of estimate income ta)es for eac" ;$arter of t"e 'ear* i%ie #' t"e estimate income for t"e 'ear1 T"is approac" spreas an' progression in ta) rates o%er t"e entire 'ear in accorance &it" t"e integra+ t"eor' of interim reporting1

14

T"e iscrete t"eor' ass$mes t"at eac" ;$arter is a separate an inepenent acco$nting perio t"at stans a+one1 @' contrast* t"e integra+ t"eor' treats eac" interim perio as an essentia+ part of eac" ann$a+ perio1 T"e integra+ t"eor' is re;$ire $ner GAAP reporting for interim reports1

15

FASB ASC Topic 270 specifies t"at minim$m isc+os$res for interim reports s"o$+ inc+$e gross re%en$es* pro%ision for income ta)es* e)traorinar' items an c$m$+ati%eeffectt'pe c"anges on a netofta) netofta) #asis* an net income an re+ate EPS amo$nts as #asic reporting reporting items1 In aition* isc+o isc+os$r s$res es are re;$ire re;$ire  of seasona seasona++ cost cost an re%en$ re%en$e* e* signifi significan cantt c"ange c"angess in income income ta) estimat estimates* es* or c"ange c"angess in financi financia+ a+ pos positio ition* n* an materia+ materia+ conting contingenci encies* es* e)traor e)traorinar inar' ' an $n$s$a+ or infre;$ent+' occ$rring items1

Chapter 15

15-3

SOLUTIONS TO EXERCISES Solution E15-1 1 2 3

d a d

b d b

4 5 6

Solution E15-2 1

Revenue tests 10% revenue test :

Conrete and stone produts Constrution umber and %ood produts 'uilding materials (t)er

Revenue from Affiliated and Unaffiliated Customers $ 400,000 ",000,000 ",&00,000 ",000,000 "00,000 $4,300,000

Reportable Segment Test Value $430,000 !o #es #es #es !o

Combined Revenue from Reportable Segments to Unaffiliated Customers

Combined Revenue from All Segments to Unaffiliated Customers $ 400,000 ",000,000 ",000,000 *00,000 "00,000 $ 3,"00,000

75% revenue test :

Conrete and stone produts Constrution umber and %ood produts 'uilding materials (t)er

$ ",000,000 ",000,000 *00,000 $

+,*00,000

Sine t)e $+,*00,000 ombined revenue from reportable segments to unaffiliated ustomers is greater t)an -. of $3,"00,000 revenue for all unaffiliated ustomers, no additional segments )ave to be reported/

2

S)edule for dislosing revenue b segment:

Constrution Unaffiliated sales Affiliated sales Total Sales

3

$",000,000 $",000,000

umber and 1ood

'uilding

(t)er

Totals

$",000,000 $*00,000 $"00,000 $&00,000 $400,000 $",&00,000 $",000,000 $"00,000

$+,00,000 ",+00,000 $3,200,000

Reoniliation of segment revenue to orporate revenue Total revenue of reportable segments (t)er revenue liminations of intersegment revenue Total onsolidated revenue

$3,200,000 400,000 ",+00,000 5 $3,"00,000


15-4

Solution E15-3 Revenue test: "0. of ombined revenues total sales5 6 $34,400

T)e food servie industr, opper mine, and )emial industr are reportable segments under t)e revenue test beause t)e ea) )ave revenue in e7ess of $34,400/ Operating profit test: "0. of t)e greater of t)e ombined operating profit of all industries )aving operating profit $44,+-05 or t)e ombined operating loss of all industries )aving operating losses $"+,-05/

T)e food servie industr, opper mine, )emial industr, and agriultural produts industr are reportable segments beause t)e ea) )ave operating profit or loss in e7ess of $4,4+-/ Asset test: "0. of ombined assets $3"2,000 total assets less $"*,-00 orporate assets5 6 $30,+-0/

T)e food servie industr and )emial industr are reportable segments beause t)e )ave assets in e7ess of $30,+-0/ Reportable segments t)ose t)at meet at least one of t)e tests5: food servie industr, opper mine, )emial industr, and agriultural produts industr/

Solution E15-4 Wow Corporation Segment Revenue for +0"" (in thousands)

Sales to unaffiliated ustomers 9ntersegment sales Total

United States $"00,000 30,000 $"30,000

Canada $3*,000 "*,000 $-+,000

(t)er 8oreign $4+,000 &,000 $-0,000

Sine revenue from reportable operating segments of $"3*,000 is greater t)an -. of onsolidated revenue $"&,0005, no additional segments need be reported/ Revenue Reoniliation: Reportable Segments (t)er segments 9ntersegment revenue Consolidated revenue

$"&+,000 -0,000 -4,0005 $"&,000

Chapter 15

Solution E15-5 1

15-5

A9C;A adapted<

 Revenue test value 6 $3,+-

9ndustries A, ', C, and 

Operating profit test value 6 $-&0

9ndustries A, ', C, and 

Identifiable assets test value 6 $*,-0 and 

9ndustries A, ', C, =,

2

d Ten perent of ombined revenues of all industr segments/

3

b Revenue test value: "0. of sales to unaffiliated $4,0005 and affiliated $",+005 ustomers 6 $-+0

4

b (nl 'e> and =? )ave total revenues revenues:

≥ "0.

of $"**,000 ombined

'e> $+4,000 total revenue @ $"*,*00 =? $""&,000 total revenue @ $"*,*00

5

d 9f sales to a single ustomer total "0. or more of ?ums reported revenues $-0,000,000 dislosed/

× "0.5,

maBor ustomer data s)ould be

6

a 9f revenues generated b foreign operations in one ountr are material "0. or more5 of onsolidated revenue, ?um s)ould report information about t)at ountrs foreign operations/

7

 T)e materialit riteria for reporting a segment based on revenue is "0 perent of total bot) e7ternal and intersegment, eliminating ans%er b5 revenue not inome, eliminating ans%er a5 of all operating segments not Bust t)ose reporting a profit, eliminating ans%er d5/



b Sales to ot)er segments are al%as inluded in segment inome/ T)e ot)er t)ree options generall %ould not be inluded but an of t)em ould be inluded/ 9nlusion %ould depend on %)et)er it %as inluded in t)e performane report evaluated b t)e )ief operating deision ma>er/


15-6

Solution E15-6 1

 apan is t)e onl foreign segment t)at )as segmental revenues inluding intersegment revenues5 of over "0. of total segment revenues of $*3,000/

2

 United States Canada ?erman apan Ee7io (t)er foreign Total foreign

Assets $-0,000 ,-00 &,-00 2,000 +,000 ",-00 $&,-00

@ D @ @ D

Test Value $,&-0 $,&-0 ,&-0 ,&-0 ,&-0

Reportable ?eograp)i Area es no es es no

T)e test value to determine reportabilit is "0 perent of onsolidated segment assets of $&,-00/

3

b United States on all t)ree tests, apan on t)e revenue and asset tests, and ?erman on t)e operating profit and asset tests/

Solution E15-7 1

d

2



3

d 9nome ear to date Ta7 rate ess: Ta7 in prior return periods Fuarterl period ta7 e7pense

4

"st Fuarter $+40,000 34 . &",*00 0 $ &",*00

+nd Fuarter $4+0,000 30 . "+*,000 &",*00 $ 44,400

a stimated total ta7es of $+*,"-0 inome 6 +3/.

÷ $""0,000

estimated preta7

Solution E15- Ent Corporation S)edule of 9nome b Fuarter for +0""

9nome earGtoGdate Fuarterl period inome 9nome ta7 e7penseH !et inome H

"st Fuarter $30,000

+nd Fuarter $0,000

3rd Fuarter $""0,000

4t) Fuarter $"-0,000

#ear +0"" $"-0,000

$30,000 &,3-0 5 $+",*-0

$40,000 "","335 $+&,&*

$ 40,000 "","33 5 $ +&,&*

$ 40,000 "","34 5 $ +&,&**

$"-0,000 4",-0 5 $"0&,+-0

9nome ta7 e7pense omputations: "st Fuarter

$30,000

× /+&333

6 $&,3-0

Chapter 15

+nd Fuarter

$0,000

3rd Fuarter

$""0,000

× /+&333 × /+&333

6 $"2,4&3 G $&,3-0 6 $"","33 6 $30,*"* G $"2,4&3 6 $"","33

4t) Fuarter

$"-0,000

× /+&333

6 $4",-0 G $30,*"* 6 $"","34

15-7


15-8

Solution E15-! 'ased on A9C;A< 1

b T)e inventor loss %as not e7peted to be temporar, and t)erefore, t)e deline %as reogniIed in t)e first period/ T)e subseJuent reover to t)e original ost is reogniIed in t)e t)ird period/

2

b T)e e7traordinar loss of $0,000 )as to be dislosed, and t)e annual insurane premium )as to be alloated $+-,000 per Juarter/

3

d T)e full $3*0,000 loss is inluded in t)e seond Juarter interim report beause t)e loss is permanent/

4

a An e7traordinar loss is alloated to t)e Juarter to %)i) it relates/ 9n t)is ase t)e $300,000 e7traordinar loss is assigned to t)e t)ird Juarter/

5

a Under t)e integral t)eor ea) Juarterl period is an integral part of ea) annual period/ T)us, propert ta7es of $+0,000 $&0,000 × +-.5 and e7eutive bonuses of $&0,000 $3+0,000 s)ould be alloated to ea) of t)e four Juarters/

× +-.5

Solution E15-1" Current ost to replae 4,000 units at $ Kistorial ost of inventor liJuidated 4,000 units at $-

$ +&,000 +0,000

AdBustment to ost of sales 4,000 units Cost of sales

&,000

× $

AdBusted ost of sales for t)e first Juarter

G $-5<

--0,000 $--&,000

Chapter 15

15-9

SOLUTIONS TO #RO$LE%S Solution #15-1 1

Reportable segments under t)e "0. revenue test: Test value is "0. of $","-&,000 total sales, or $""-,&00/ Reportable industr segments inlude t)e apparel, furniture, lumber and %ood produts, and te7tiles segments/

2

Test value for -. revenue test is t)e ombined revenue from sales to unaffiliated ustomers b all industr segments of $&2+,000

× -.

$**2,000

6

Reportable segments: Apparel 8urniture umber and %ood produts Te7tiles Total

$"*4,000 +0&,000 "-,000 -0,000 $-2,000

Sales to unaffiliated ustomers b t)e reportable industr segments of $-2,000 is less t)an t)e $**2,000 test value/ T)erefore, additional segments must be identified as reportable segments/ T)e onstrution industr, as losest to t)e "0. riteria, s)ould be inluded as a reportable segment/

3

Under t)e assumption t)at tobao and paper s)are t)e maBorit of t)eir operating )arateristis t)e %ould be ombined into one segment t)at no% meets t)e "0. test and omplies %it) t)e -. riteria/ Constrution %ould no longer need to be reported/ !ote to dislose information about segment data:

Apparel Tobao and paper 8urniture umber and %ood produts Te7tiles (t)er segments Total revenue

Sales to Unaffiliated Customers $ "*4,000 "&3,000 +0&,000 "-,000 -0,000 ""+,000 $ &2+,000

Sales to Affiliated Customers GGG $

*,000 20,000 "0,000 GGG $+**,000

Total Sales $ "*4,000 "&3,000 +"4,000 +*-,000 ++0,000 ""+,000 $","-&,000

Reoniliation of Segment Revenue to Consolidated Revenue: Reportable segment revenue (t)er revenue 9ntersegment revenue Consolidated revenue

$",04*,000 ""+,000 +**,0005 $ &2+,000


15-1

Solution #15-2 1

Reportable segments Revenue test $*00,000 L $"0-,0005 Reportable segments:

× "0.

6 $0,-00 8ood C)emial 'everages

Operating profit test $&-,000 L $"0,0005 Reportable segments:

× "0.

Asset test $*4-,000 × "0. 6 $*4,-00 Reportable segments:

2

$3-0,000 $"-0,000 $ +,000

6 $2,-00 8ood C)emial 'everages

$ 4-,000 $ +3,000 $ "&,000

8ood C)emial

$3"0,000 $"-0,000

Reportable segments test Test value $*00,000 onsolidated sales Unaffiliated sales:

× -.

6 $4-0,000 8ood C)emial 'everages Total

Sales b reportable segments $4+,0005 are greater t)an t)e $4-0,000 test value and no additional reportable segments are reJuired/

$300,000 ""0,000 *+,000 $4+,000

Chapter 15

15-11

Solution #15-3 1

(perating segments foreign geograp)i areas5: Revenue test

Test Value Revenue Canada Ee7io 'raIil Sout) Afria United States

$ +4,000

≥

+0,000 ++,000 +-,000

D D

"42,000

$+40,000 × "0.5 $+4,000

Reportable ?eograp)i Area es

≥

+4,000 +4,000 +4,000

no no es

≥

+4,000

es

$+40,000 Asset test

Test Valuea Assets Canada Ee7io 'raIil Sout) Afria United States a

$ 30,000

≥

"2,000 +0,000 3",000

D D

"-0,000

$+-0,000 × "0.5 $+-,000

Reportable es

≥

+-,000 +-,000 +-,000

no no es

≥

+-,000

es

Total segment assets 6 $+-0,000/

rofit test

Test Valuea ;rofit Canada

$ *,000

≥

Ee7io

&,000

≥

-,000

es

'raIil

-,000

≥

-,000

es

,000

≥

-,000

es

≥

-,000

es

Sout) Afria United States a

2

Reportable

$-0,000 × "0.5 $-,000

+4,000

Total segment profits 6 $-0,000/

All five geograp)i segments Canada, Ee7io, 'raIil, Sout) Afria, and t)e United States5 are reportable segments/

es


15-12

Solution #15-3 ontinued5 3

&a# Corporation S)edule of (perations in =ifferent ?eograp)i Segments for t)e ear ended =eember 3", +0"" United States

Ee7io

'raIil

Sout) Afria

Canada

Total

$"+0,000

$+0,000

$++,000

$"-,000

$"3,000

$"20,000

"",000 $+4,000

-0,000 $+40,000

Sales to unaffilG iated ustomers 9ntersegment transfers Total revenue

+2,000 $"42,000

$+0,000

$++,000

"0,000 $+-,000

(perating profit

$ +4,000

$ &,000

$ -,000

$ ,000

$ *,000

$ -0,000

9dentifiable assets

$"-0,000

$"2,000

$+0,000

$3",000

$30,000

$+-0,000

Reoniliations: Revenue: Total revenue of reportable segments (t)er revenues limination of intersegment revenues Total onsolidated revenues

$+40,000 0 -0,000 5 $"20,000

;rofit or oss: Total profit or loss for reportable segments (t)er profit or loss limination of intersegment profit and loss Unalloated amounts Consolidated inome before ta7es

$ -0,000 0 0 0 $ -0,000

Assets: Total assets for reportable segments (t)er assets Consolidated total

$+-0,000 0 $+-0,000

Chapter 15

15-13

Solution #15-4 1

Reportable segments: Revenue test

8oods Soft drin>s =istilled spirits Cosmetis ;a>aging (t)er 4 minor segments5 Total revenue

Sales to Affiliated and Unaffiliated Customers $ +"0 ",0*0

Test Value D $+40 +40 ≥

-0

≥

+40

+00 "+0 +40 $+,400

D D

+40 +40

Reportable Segment no es es no no

75% revenue test

8oods Soft drin>s =istilled spirits Cosmetis ;a>aging (t)er 4 minor segments5

Sales to Unaffiliated Customers Reportable All Segments Segments $ "&0 $ 200 200 --0 --0 +00 ""0 +40 $",4-0 $+,"&0

Sine $",4-0 D -. × $+,"&05, ot)er reportable segments must be identified to bring t)e total revenue from unaffiliated ustomers for reportable segments up to $",*3-/ 9f no furt)er aggregation is possible, a logial approa) is to inlude osmetis, t)e ne7t largest segment in terms of sales to unaffiliated ustomers/ 9f furt)er aggregation of some of t)e ot)er%ise nonG reportable segments %ere possible t)e met t)e maBorit of t)e aggregation riteria5, a ombined segment ma t)en meet t)e reportabilit riteria and %ould be reported instead of osmetis/ T)e test: $200 L $--0 L $+00 6 $",*-0 Sine $",*-0 @ $",*3-, t)e reportable segments are soft drin>s, distilled spirits, and osmetis/


15-14


%'r Corporation S)edule of Sales to Affiliated and Unaffiliated Customers b Segments for t)e ear ended =eember 3", +0"" Soft =rin>s Sales to unaffiliated ustomers Sales to affiliated ustomers Total revenue

=istilled Spirits

200

$--0

"*0

+0

$",0*0

$-0

$

Cosmetis

(t)er Segments

Totals

$+00

$-30

$+,"&0

40

++0

$-0

$+,400

$+00

Reoniliation: Revenue from reportable segments (t)er revenue limination of interompan revenue Consolidated revenue

3

$",&30 -0 ++0 5 $+,"&0

%'r Corporation =islosure of Revenue from =omesti and 8oreign (perations for t)e ear ended =eember 3", +0""

Sales to unaffiliated ustomers 9nterarea sales Total revenue

United States $",&-0 +00 $+,0-0

Total 8oreign $330 +0 $3-0

apan $+-0 $+-0

Chapter 15

15-15

Solution #15-5 1

Reportable segments: Revenue test

9dentified Segment Revenues $",000

Reportable Segment es

≥

Test Value $,400

Tobao

",000

≥

,400

es

umber Te7tiles

,000 +*,000

D ≥

,400 ,400

no es

D

,400

8ood

8urniture

,000 $4,000

no

Operating profit test

8ood Tobao

'efore Ta7 ;rofit $ +,000

(perating oss

4,000 $-005

≥

Test Value $",0-0


≥

",0-0

es

D

no es es

umber Te7tiles

3,000

≥

",0-0 ",0-0

8urniture

",-00

≥

",0-0

≥

Test Value $,-00

$"0,-00

$-005

Asset test

8ood

9dentifiable Assets $"2,000


Tobao

+",000

≥

,-00

es

umber Te7tiles

*,000 ++,000

D ≥

,-00 ,-00

no es

D

,-00

8urniture

,000 $-,000

8ood, tobao, te7tile, and furniture segments are reportable 2 segments/

no


15-16

Solution #15-5 ontinued5 Sales to Unaffiliated Customers Reportable All Segments Segments $"+,000 $"+,000 "0,000 "0,000 ,000 "&,000 "&,000 ,000 ,000 $4,000 $-4,000

3

8ood Tobao umber Te7tiles 8urniture

Sine t)e $4,000 revenue from unaffiliated ustomers of previousl identified reportable operating segments is greater t)an -. onsolidated revenue -. × $-4,000 6 $40,-005, no additional reportable segments )ave to be identified/

4 Ra( Co)pan* S)edule of (perations in =ifferent Segments for t)e ear ended =eember 3", +0""

Tobao

Te7tiles

8urniG ture

(t)er

Total

$"+,000

$"0,000

$"&,000

$,000

$,000

$-4,000

8ood Revenues Sales to unaffiliG ated ustomers Sales to affiliated Customers Segment revenue Operating profit Segment operating ;rofit

-,000 $",000

,000 $",000

&,000 $+*,000

$,000

$,000

+0,000 $4,000

$ 4,000

$ 4,000

$ -,000

$",-00

$ -005

$"4,000

Assets 9dentifiable assets =epreiation

$"&,000 $ ",000

$"2,000 $ +,000

$++,000 $ 3,000

$,000 $ -00

$*,000 $+,-00

$+,000 $ 2,000

R'+on+iliation o, r''nu'. Revenue from reportable segments Revenue from eJuit investees (t)er revenue 9ntersegment eliminations Consolidated revenue

$ *,000 2,000 ,000 +0,000 5 $ *3,000

R'+on+iliation o, in+o)'. Reportable segment inome 9nome from eJuit investees (t)er inome 9nterest e7pense Consolidated inome before ta7es

$ "4,-00 2,000 -005 ,000 5 $ "*,000

R'+on+iliation o, a//'t/. Reportable segment assets (t)er segment assets 9nvestment in eJuit affiliates Corporate assets Consolidated assets

$ **,000 *,000 *0,000 4,000 $"3*,000

Chapter 15

15-17

Solution #15-6 Tut Corporation S)edule of =islosures for 9ndustr Segments for t)e ear ended =eember 3", +0""

Revenue Sales to unaffiliated ustomers 9ntersegment sales Total sales !"penses Cost of sales ?eneral e7penses Selling e7penses 9nterest e7pense Total e7penses Segment operating profit

Assets

C)emial Segment

8ood Segment

=rug Segment

$"+-,000 3-,000 "*0,000

$""-,000 +-,000 "40,000

$"+0,000 "+0,000

$3*0,000 *0,000 4+0,000

$ &0,000 "-,000 +0,000 -,000 "+0,000 $ 40,000

$ 0,000 "0,000 "-,000 2-,000 $ 4-,000

$ *0,000 "0,000 "-,000 -,000 20,000 $ 30,000

"+-,000

$+00,000

$"&0,000

$"-0,000

$-30,000

R'+on+iliation o, r''nu'. Revenue from reportable segments Revenue from eJuit investees 9nterest revenue 9ntersegment eliminations Consolidated revenue R'+on+iliation o, in+o)'. Reportable segment inome 9nome from eJuit investees 9nterest inome Corporate e7pense Einorit interest inome 9ntersegment eliminations Consolidated inome before ta7es

R'+on+iliation o, a//'t/. Reportable segment assets 9nvestment in eJuit affiliates Corporate assets limination of intersegment balanes Consolidated assets

Totals

$

$

4+0,000 30,000 "0,000 *0,000 5 400,000

$

""-,000 30,000 "0,000 -,0005 "-,0005 30,000 5

$

"0-,000

$

-30,000 300,000 +00,000 30,000 5 $",000,000


15-18

Solution #15-7 1

Reportable segments Revenue test

Segment 8ood

9ndustr Segment Revenue

Test Value "0.

× $+,300,0005

(perating Reportable Segment

$",0"0,000

≥

$+30,000

es

;a>ing

-*0,000

≥

+30,000

es

Te7tile

330,000

≥

+30,000

es

Test Value

Reportable Segment

All ot)er

400,000 $+,300,000

Operating profit test

Segment 8ood

(perating ;rofit

× $300,0005

$""0,000

≥

$30,000

#es

""0,000

≥

30,000

#es

-,000 -,000 $300,000

D

30,000

;a>ing Te7tile All ot)er

"0.

!o

Asset test

Segment 8ood

Segment Test Value

(perating Assets

× $+,000,0005

-0,000

≥

$+00,000

#es

;a>ing

-00,000

≥

+00,000

#es

Te7tile

3-0,000

≥

+00,000

#es

All ot)er

$

"0.

Reportable Segment

400,000 $+,000,000

Chapter 15

15-19


Co0 Co)pan* (perations in =ifferent Segments at or for t)e ear ended =eember 3", +0"" (#ata in $housands of #ollars) 8ood 9ndustr

;a>ing 9ndustr

Te7tile Segments

8oreign (peration

All (t)er

Totals

2-0

$-00

$300

$+-0

$400

$+,400

Revenues Sales to unaffiliG ated ustomers 9ntersegment sales at mar>et

$

*0

*0

30

-0

Total Segment Sales

$",0"0

$-*0

$330

$300

$400

Operating profit Segment operating ;rofit

$

""0

$""0

$

-

$ +-

$ -

9nome before ta7es

$

""0

$""0

$

-

$ +-

$ -

$

Assets 9dentifiable assets

$

00

$-00

$3+-

$+00

$400

$+,"+-

R'+on+iliation o, r''nu'. Revenue from reportable segments (t)er segment revenue 9ntersegment eliminations 9nome from eJuit investees Consolidated revenue R'+on+iliation o, in+o)'. Reportable segment inome (t)er segment inome 9nome from eJuit investees 9nterest e7pense Corporate e7pense Consolidated inome before ta7es R'+on+iliation o, a//'t/. Reportable segment assets (t)er segment assets 9nvestment in eJuit affiliates Corporate assets Consolidated assets

+00

$+,*00

$+,+00 400 +005 "00 $+,-00

$

$

+-0 "00 +05 + 5 3&0

$",+400 ",000 -0 $3,"-

3+-


15-2

Solution #15- Tor Corporation S)edule of 9nome b Fuarter for +0"" 1

8irst $-0,000

$ "0,000

× +0.

Remainder $"*0,000 M -0,0005 × 34. ess amount subBet to dividends reeived dedution $+0,000

-,4405

× &0. × 34.5

Total ta7 for t)e ear Total 9nome ffetive ta7 rate

2 9nome earGtoGdate Fuarterl period inome 9nome ta7 e7penseH !et inome H

3,400

$ 4",2*0 $"*0,000 +*/++-.

"st Fuarter $+0,000

+nd Fuarter $-0,000

3rd Fuarter $""0,000

4t) Fuarter $"*0,000

#ear +0"" $"*0,000

$+0,000 -,+4 5 $"4,--

$30,000 ,&*& 5 $++,"3+

$ *0,000 "-,34 5 $ 44,+**

$ -0,000 "3,""3 5 $ 3*,&&

$"*0,000 4",2*0 5 $""&,040

9nome ta7 e7pense omputations: "st Fuarter

$+0,000

× /+*++-

6 $-,+4-

+nd Fuarter

$-0,000

× /+*++-

6 $"3,""3 G $-,+4- 6 $,&*&

3rd Fuarter

$""0,000

× /+*++-

6 $+&,&4 G $"3,""3 6 $"-,34

4t) Fuarter

$"*0,000

× /+*++-

6 $4",2*0 G $+&,&4 6 $"3,""3

SMch15Beams

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