Selected information, which is reported to the chief operating officer, for the five segments of Rad Company for the year ended December 31, 2011, is as follows:
| Food | Tobacco | Lumber | Textiles | Furniture | General Corporate | Consolidated |
Revenue Data |
|
|
|
|
|
|
|
Sales to unaffiliated customers | $12,000 | $10,000 | $7,000 | $18,000 | $7,000 | $54,000 |
|
Sales to affiliated customers | 5,000 | 7,000 |
| 8,000 |
|
| 20,000 |
Income from equity investees |
|
|
| 3,000 |
| $6,000 | 9,000 |
Total revenue | $17,000 | $17,000 | $7,000 | $29,000 | $7,000 | $6,000 | $83,000 |
Expense Data |
|
|
|
|
|
|
|
Cost of sales | $10,000 | $9,000 | $4,000 | $16,000 | $4,000 |
| $43,000 |
Depreciation expense | 1,000 | 2,000 | 2,500 | 3,000 | 500 |
| 9,000 |
Other operating expenses | 2,000 | 2,000 | 1,000 | 2,000 | 1,000 |
| 8,000 |
Interest expense | 2,000 |
|
| 2,000 | $3,000 | 7,000 |
|
Income taxes | 1,000 | 2,000 | (250) | 3,000 | 750 | 1,500 | 8,000 |
Net income | $1,000 | $2,000 | $(250) | $3,000 | $750 | $1,500 | $8,000 |
Asset Data |
|
|
|
|
|
|
|
Segment assets | $18,000 | $19,000 | $6,000 | $22,000 | $7,000 | a | $72,000 |
Investment in affiliates |
|
|
| 20,000 |
| $40,000 | 60,000 |
General corporate assets |
|
|
|
|
| 4,000 | 4,000 |
Intersegment advances | 1,000 | 2,000 |
|
|
|
|
|
Total assets | $19,000 | $21,000 | $6,000 | $42,000 | $7,000 | $44,000 | $136,000 |
The lumber segment has not been a reportable segment in prior years and is not expected to be a reportable segment in future years.
REQUIRED
1. Prepare schedules to show which of the segments are reportable segments under:
a The 10 percent revenue test
b The 10 percent operating-profit test
c The 10 percent asset test
2. Which of the segments meet at least one of the tests for reportable segments?
3. Must additional reportable segments be identified?
4. Prepare a schedule for appropriate disclosure of the above segmented data in the financial report of Rad Company for the year ended December 31, 2011.
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