Which of the following facts would not make an operating segment reportable? Question 10 options: a)...
Which of the following facts would not make an operating segment reportable?
Question 10 options:
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Homework Answers
The correct answer is C) 75% of the segment's revenues are earned from one unaffiliated customer.
Supporting explanations:
An operating segment is called a reportable segment when -
* Revenues of an operating segment is 10% or more of the total revenues of the company
* Profit or Loss of an operating segment is 10% or more of the total profit or loss of the company
* Assets of an operating segment is 10% or more of the total assets of the company
In (a) option, segment revenues are 20% of the total revenues of the company - Hence, it is a reportable Segment
In (b) option, segment profit is $50,000 which is 11.63% of total company's total revenue of $430,000 ($50,000/$430,000*100) - Hence, it is a reportable segment.
In (d) option, segment assets are 11% of the total assets of the company - Hence, it is a reportable segment.
But, in option (c ), the 75% of segment revenue is earned from one unaffiated customer so it is not a reportable segment.
Therefore, option c is the correct answer.
Add Answer to:
Which of the following facts would not make an operating segment
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Sales
$
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Consolidated income before taxes
136,000
Total assets
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Data reported for West’s four operating divisions are as
follows:
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Division B
Division C
Division D
Sales to outsiders
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$
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$
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$
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58,000
18,000
19,000
Traceable costs
253,000
98,000
298,000
90,000
Assets
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113,000
508,000
83,000
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West Corporation reported the following consolidated data for
20X2:
Sales
$
1,165,000
Consolidated income before taxes
136,000
Total assets
1,280,000
Data reported for West’s four operating divisions are as
follows:
Division A
Division B
Division C
Division D
Sales to outsiders
$
440,000
$
166,000
$
490,000
$
69,000
Intersegment sales
58,000
18,000
19,000
Traceable costs
253,000
98,000
298,000
90,000
Assets
471,000
113,000
508,000
83,000
Intersegment sales are priced at cost, and all goods have been
subsequently sold to nonaffiliates....
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