Problem

Selected information, which is reported to the chief operating officer, for the five segme...

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.

Step-by-Step Solution

Request Professional Solution

Request Solution!

We need at least 10 more requests to produce the solution.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the solution will be notified once they are available.
Add your Solution
Textbook Solutions and Answers Search
Solutions For Problems in Chapter 15