Slatter Corporation operates primarily in the United States. However, a few years ago, it opened a plant in Spain to produce merchandise to sell there. This foreign operation has been so successful that during the past 24 months the company started a manufacturing plant in Italy and another in Greece. Financial information for each of these facilities follows:
| Spain | Italy | Greece |
Sales | $395,000 | $272,000 | $463,000 |
Intersegment transfers | -0- | -0- | 62,000 |
Operating expenses | 172,000 | 206,000 | 190,000 |
Interest expense | 16,000 | 29,000 | 19,000 |
Income taxes | 67,000 | 19,000 | 34,000 |
Long-lived assets | 191,000 | 106,000 | 72,000 |
The company’s domestic (U.S.) operations reported the following information for the current year:
Sales to unaffiliated customers | $4,610,000 |
Intersegment transfers | 427,000 |
Operating expenses | 2,410,000 |
Interest expense | 136,000 |
Income taxes | 819,000 |
Long-lived assets | 1,894,000 |
Slatter has adopted the following criteria for determining the materiality of an individual foreign country: (1) sales to unaffiliated customers within a country are 10 percent or more of consolidated sales or (2) long-lived assets within a country are 10 percent or more of consolidated long-lived assets.
Apply Slatter’s materiality tests to identify the countries to report separately.
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