Exam 12: Interim Reporting and Disclosures About Segments of an Enterprise

Consider the following: ? ? Case $A \quad$ Income (loss) for quarters 1 through 4 is $( \$ 50,000 ) , \$ 30,000 , \$ 40,000$ , and $\$ 40,000$ , respectively. Future projected income for the year is uncertain at the end of quarters 1 and 2. Annual income at the end of quarter 3 is estimated to be $\$ 20,000$ . No carryback benefit exists, and any future annual benefit is uncertain. Case B $\quad$ Assume the same facts as in Case A. However, at the end of quarters 1 through 3 , annual income is estimated to be $\$ 40,000$ . Case C $\quad$ Quarterly income (loss) levels were $\$ 15,000 , ( \$ 35,000 )$ , ( $\$ 75,000 )$ , and $\$ 25,000$ . A yearly operating loss of $\$ 70,000$ was anticipated throughout the year. Frior years' income of $\$ 28,000$ is avail able for carryback. The same tax rates were relevant to the carryback period Required: ? For cases A through C, complete the schedule that follows: Assume that the statutory tax rate is 15% on the first $50,000 of income, 25% on the next $25,000, and 30% on income in excess of $75,000. ?

A corporation made up of an automobile manufacturer, a plastics maker, a spark plug manufacturer, a steel mill, and a battery maker is an example of a​

The management of Trident, Inc.is trying to determine if three of the company's non-reportable segments should be combined into one single segment for reporting purposes.In what five ways must these segments be similar in order to be reported as one?

Abbott Inc.began the year with 750 units of inventory valued at $20 each under LIFO.During the first quarter, 300 units were purchased at $25 each and another 250 units were purchased at $28 each.Assume that 200 units are on hand at the end of the first quarter and that the current replacement cost is $30 per unit. ? Required: ? If Abbott plans to have 500 units on hand at year end, determine the cost of goods sold for the first quarter.

Cammy Company had inventory at the end of the first quarter having a cost of $420,000 and a market value of $410,000.Cammy recognized a $10,000 loss in its first quarter financial statements due to market declines.At the end of the second quarter, the inventory had a cost of $450,000, and a market value of $480,000.Cammy's action in the second quarter should be:

Which of the following is not required to be disclosed on an entity-wide basis if it has not been disclosed in the segment disclosures?

Which of the following best describes the proper accounting for interim financial reports?

The tax benefit associated with a year-to-date operating loss should be recognized if:

Abel Corporation sold equipment in the first quarter of 2016 at a $150,000 loss.How much of the loss should appear in the 2016 second- and third-quarter income?

Saunders Corp., which accounts for inventory using the LIFO method, had 2,000 units in beginning inventory at a cost of $40 and had purchased 500 more for $43.During the quarter, 1,300 units were sold.It is expected that the ending inventory at year end will be 1,800 units as Saunders anticipates purchasing additional units for $45.The excess replacement cost for temporary liquidation for the quarter would be:

In determining if two operating segments may be combined into one, which of the following factors should be considered?

East Company, a highly diversified corporation, reports the results of operations quarterly.At the beginning of the third quarter, management decided to discontinue its recreational division.At this time, a formal plan was authorized, calling for disposal by year end.Results for the current year, excluding taxes, are as follows: ? ? Quarter Continuing Operations Discontinued Segment First \ 33,000 Second 40,200 Third 62,000 \ (6,500) Fourth 71,500 1,200 The following additional information was provided: ? a.The first two quarters include results of operations of the discontinued segment.The segment reported first and second quarter pretax losses of $8,000 and $12,000, respectively.? ? b.The estimated annual income tax rate in the first and second quarters was 35%.Because of the decision to discontinue, the revised annual effective tax rate was determined to be 40%.? Required: ? For each quarter, present the results of operations and the related tax expense or tax benefit.Where applicable, include the original and restated amounts in the presentation.

Ansfield, Inc.has several potentially reportable segments.The following financial information has been determined for the current fiscal year: ? Consolidated net income \ 1,000,000 Operating income before taxes 1,500,000 Net operating income of all segments 1,350,000 Total consolidated revenue 8,000,000 Total revenue of all segments, excluding intersegment sales 7,000,000 Total intersegment sales 1,200,000 Consolidated total assets 50,000,000 Total assets of all segments 45,000,000 The minimum amount of assets a segment must have to qualify as reportable is ____.

Ansfield, Inc.has several potentially reportable segments.The following financial information has been determined for the current fiscal year: ? Consolidated net income \ 1,000,000 Operating income before taxes 1,500,000 Net operating income of all segments 1,350,000 Total consolidated revenue 8,000,000 Total revenue of all segments, excluding intersegment sales 7,000,000 Total intersegment sales 1,200,000 Consolidated total assets 50,000,000 Total assets of all segments 45,000,000 The minimum amount of revenues a segment must have to qualify as reportable is ____.

The primary emphasis of interim reporting is on:

In addition to disclosures about reportable segments, companies are required to provide enterprise-wide disclosures.Describe the information included in enterprise-wide disclosures.

In order to generate interim financial reports that contain a reasonable portion of annual expenses, which of the following statements is true?

Harrison Company paid the annual fee of $30,000 for an equipment maintenance contract on July 1, the first day of its second quarter and incurred research costs in the same quarter of $12,000.The research did not prove to be fruitful.Harrison should recognize the following expense amount in the second quarter:

If a company is utilizing LIFO inventory costing, what might be the effect on the calculation of Cost of Goods sold in an interim financial statement?

Which of the following is not a limitation on the number of reportable segments?