Exam 15: Segment and Interim Financial Reporting

Interim financial reports provide more timely,extensive information than annual financial reports.

For internal decision-making purposes,Calam Corporation's operating segments have been identified as follows: Required: 1.In applying the "operating profit or loss" test to identify reporting segments,what is the test value for Calam Corporation? 2.Using the "reported profit or loss" test,which of Calam's operating segments will also be reporting segments?

The gross profit method for estimating inventory and cost of goods sold can be used for interim financial reports if the periodic inventory method is not used and it is too costly to perform an inventory count.

Dott Corporation experienced a $100,000 extraordinary loss in the second quarter of 2014 in their East Coast operating segment.The loss should be recognized

Jacana Company uses the LIFO inventory method.During the second quarter,Jacana experienced a 100-unit liquidation in its LIFO inventory at a LIFO cost of $430 per unit.Jacana considered the liquidation temporary and expects to replace the units in the third quarter at an estimated replacement cost of $460 a unit.The cost of goods sold computation in the interim report for the second quarter will

Krull Corporation is preparing its interim financial statements for the third quarter of calendar 2014. The following trial balance information is available for third quarter: Additional information At the end of the year,Krull distributes annual employee bonuses and charitable donations that are estimated at $40,000,and $12,000,respectively.The cost of goods sold includes the liquidation of a $45,000 base layer in inventory that Krull will restore in the fourth quarter at a cost of $75,000.Effective corporate tax rate for 2014 is 32%. Required: Prepare Krull's interim income statement for the third quarter of calendar 2014.

For internal decision-making purposes,Falcon Corporation identifies its industry segments by geographical area.For 2014,the total revenues of each segment are provided below.There are no intersegment revenues. Required: 1.Which operating segments will be considered reporting segments based on the revenue test? 2.What is the test value for determining whether a sufficient number of segments are reported? 3.What will be the minimum number of segments that must be reported?

For internal decision-making purposes,Elom Corporation's operating segments have been identified as follows: Corporate assets are typically allocated back evenly to the segments for internal analysis purposes. Required: 1.In applying the "asset" test to identify reporting segments,what is the test value for Elom Corporation? 2.Using the "asset" test,which of Elom's operating segments will also be reporting segments?

Osprin Corporation has three operating segments,as summarized below: Required: 1.Using the revenue test,what is the minimum amount of revenue of a reportable segment? 2.Using the operating profit or loss test,what is the minimum amount of operating profit or loss of a reportable segment? 3.Using the asset test,what is the minimum amount of assets of a reportable segment? 4.Based on the three tests,which segments will be separately reported?