Exam 13: Segment and Interim Reporting

Ridge Company is in the process of determining its reportable segments for the year ended December 31,20X8.As the person responsible for determining this information,you gather the following information: Required: a)Using the appropriate tests,determine which of the industry segments listed above are reportable for 20X8.Show your supporting computations in good form. b)Indicate whether or not Ridge's reportable segments satisfy the 75 percent test.Show your supporting computations in good form. Problem 72 (continued):

Missoula Corporation disposed of one of its segments in the second quarter and incurred a gain from disposal of discontinued segment of $600,000,net of taxes.What is the effect of this gain from disposal of discontinued segment?

Lloyd Corporation reports the following information for 20X8 for its three operating segments: Indirect operating expenses are allocated to segments based upon the ratio of each segment's traceable operating expenses to total traceable operating expenses.Interest expense is allocated to segments based upon the ratio of each segment's sales to total sales. Required: a)Calculate the operating profit or loss for each of the segments for 20X8. b)Determine which segments are reportable,applying the operating profit or loss test. Problem 71 (continued):

Follett Company incurred a first quarter operating loss before income tax effect of $2,000,000.This is a normal occurrence for Follett because of seasonal fluctuations.Experience has demonstrated the income earned during the remaining quarters far exceeds the first quarter losses each year.Follett estimates its annual income tax rate will be 35 percent.What net loss should Follett report for the first quarter?

All of the following situations require a retrospective application of a change in a reporting entity except for:

Which of the following observations is true of the discrete view of interim reporting?

Cott Co.'s four business segments have revenues and identifiable assets expressed as percentages of Cott's total revenues and total assets as follows: Which of these business segments are deemed to be reportable segments?

Trimester Corporation's revenue for the year ended December 31,20X8,was as follows: Trimester has a reportable operating segment if that segment's revenue exceeds:

ASC 280,Disclosure about Segments of an Enterprise and Related Information,has taken what has been referred to as a "management approach" to the definition of a segment and the allocation of costs to a segment. Required: a)What is meant by a management approach? How does this concept of a management approach impact the decision to disclose information? b)How are decisions about cost allocation handled in segment disclosures?

Zeus Corporation has determined that it has 15 reportable operating segments.In order to comply with the standard for segment disclosures,Zeus Corporation should do which of the following?

On June 30,20X0,Bow Corporation incurred a $150,000 net loss from disposal of a business component.Also on June 30,20X0,Bow paid $50,000 for property taxes assessed for the calendar year 20X0.What amount of the preceding items should be included in the determination of Bow's net income or loss for the six-month interim period ended June 30,20X0?

Tyler Company incurred an inventory loss due to a decline in market prices during its first quarter of operations in 20X8.At the end of the first quarter,management of the company believed the decline in market prices to be permanent.In the second quarter,the market prices of Tyler's inventories increased above their acquisition cost.Market prices remained higher than acquisition cost during the remainder of 20X8.How should Tyler report the facts above on its first and second quarter income statements?

Biometric Corporation's revenue for the year ended December 31,20X6,was as follows: Biometric has a reportable operating segment if that segment's revenue exceeds

ASC 270 uses which view of interim reporting?

Wakefield Company uses a perpetual inventory system. In August, it sold 2,000 units from its LIFO-base inventory, which had originally cost $35 per unit. The replacement cost is expected to be $45 per unit. The company is planning to reduce its inventory and expects to replace only 1,500 of these units by December 31, the end of its fiscal year. The company replaced 1,500 units in November at an actual cost of $50 per unit. -Based on the preceding information,in the entry to record the replacement of the 1,500 units in November,Accounts Payable will be credited for:

The management approach to the definition of segments for financial reporting expects a company to: I.Report disaggregated information on the same organizational basis as used by the company's internal decision makers. II.Report disaggregated information for at least ten segments.

Interim income statements are required for Smith Orchards.Smith does most of its sales in the fall quarter of the year.These sales are both to individual and commercial customers.How do you recommend Smith report sales during the spring quarter of the year?

Samuel Corporation foresees a downturn in its business in the medium term.It expects to sustain an operating loss of $160,000 for the full year ending December 31,20X8.Samuel's tax rate is 35 percent.Anticipated tax credits for 20X8 total $8,000.No permanent differences are expected.Realization of the full tax benefit of the expected operating loss and realization of anticipated tax credits are assured beyond any reasonable doubt because they will be carried back.For the first quarter ended March 31,20X8,Samuel reported an operating loss of $30,000.How much of a tax benefit should Samuel report for the interim period ended March 31,20X8?

Davis Company uses LIFO for all of its inventories.During its second quarter of 20X9,Davis experienced a LIFO liquidation.Davis fully expects to replace the liquidated inventory in the early part of the third quarter.How should Davis report the inventory temporarily liquidated on its income statement for the second quarter?

Toledo Imports,a calendar-year corporation,had the following income before tax expense and estimated effective annual income tax rates for the first three quarters in 20X8: Toledo's income tax expense in its interim income statement for the nine months ended September 30 and for the third quarter,respectively,are: