Exam 14: Reporting for Segments and for Interim Financial Periods

The following information is available for Pink Company for 2017: a. In early April Pink made major repairs to its equipment at a cost of $90,000. These repairs will benefit the remainder of 2017 operations. b. At the end of May, Pink sold machinery with a book value of $35,000 for $45,000. c. An inventory loss of $60,000 from market decline occurred in July. In the fourth quarter the inventory had a market value recovery that exceeded the market decline by $30,000. Required: Compute the amount of expense/loss that would appear in Pink Company's June 30, September 30, and December 31, 2017, quarterly financial statements.

Companies using the LIFO method may encounter a liquidation of base period inventories at an interim date that is expected to be replaced by the end of the year. In these cases, cost of goods sold should be charged with the:

In January 2017, Cain Company paid $200,000 in property taxes on its plant for the calendar year 2017. Also in January 2017, Cain estimated that its year-end bonuses to executives for 2017 would be $800,000. What is the amount of expenses related to these two items that should be reflected in Cain's quarterly income statement for the three months ended June 30, 2017 (second quarter)?

An entity is permitted to aggregate operating segments that have similar economic characteristics under certain circumstances. Which of the following circumstances would allow aggregation of Entity A into Segment B?