Question

Sarasota Corporation is a diversified company that operates in five different industries: A, B, C, D, and E. The following information relating to each segment is available for 2018. D. Sales revenue $575,500 $54,400 $39,600 $76,200 $34,400 Cost of goods sold 19,100 49,600 267,500 19,300 30,300 Operating expenses 10,200 11,900 39,400 231,500 18,300 Total expenses 29,300 89,000 499,000 31,200 48,600 $3,200 Operating profit (loss) Identifiable assets $(12,800) $10,300 $76,500 $5,800 $35,400 $509,700 $64,300 $79,400 $50,300 Sales of segments B and C included intersegment sales of $20,200 and $101,700, respectively. (a) Determine which of the segments are reportable based on the: Reportable Segment (1) Revenue test. (2) Operating profit (loss) test. (3) Identifiable assets test. eding the number e.g. 45 or parentheses e.g. (45).) (b) Prepare the necessary disclosures required by GAAP. (Enter negative amounts using elther a negative sign pr Other Totals External Revenues Intersegment Revenues Total Revenues Cost of Goods Sold Operating Expenses Total Expenses Operating Profit (Loss) Identifiable Assets

Answer 1

Answer:

a)	Revenue Test
	(39600+76200+575500+34400+54400)*10%	78010			78010
	Segment C meets the criteria
	Operating Profit/(Loss) Test
	(10300+76500+3200+5800)*10%	9580			9120
	Segment A and C meets the criteria and Segment B in absolute terms (12800/12800)
	Identifiable Assets
	(35400+79400+509700+64300+50300)*10%	73910			73630
	Segment B and C meets the criteria of identifiable assets
b)		A	B	C	Other	Totals
	External Revenue	39,600	76,200	5,75,500	88,800	7,80,100
	Intersegment Revenues		20,200	1,01,700		1,21,900
	Total Revenues	39,600	96,400	6,77,200	88,800	9,02,000
	Cost of Goods Sold	19,100	49,600	2,67,500	49,600	3,85,800
	Operating Expenses	10,200	39,400	2,31,500	30,200	3,11,300
	Total Expenses	29,300	89,000	4,99,000	79,800	6,97,100
	Operating Profit (Loss)	10,300	-12,800	76,500	9,000	83,000
	Identifiable Assets	35,400	79,400	5,09,700	1,14,600	7,39,100
	Reconciliation of Revenues
	Total Segment Revenues		9,02,000
	Revenues of immaterial segments		-88,800
	Elimination of Intersegment revenues		-1,21,900
	Revenues from reportable segments		6,91,300
	Reconciliation of Profit or Loss
	Total Segment operating profit		83,000
	Profits of immaterial segments		-9,000
	Profits from reportable segments		74,000
	Reconciliation of Assets
	Total Segment Assets		7,39,100
	Assets of immaterial segments		-1,14,600
	Assets from reportable segments		6,24,500