Exam 13: Segment and 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:

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.

FASB has specified a "75% percent consolidated revenue test". Required: a)What is the 75% test? b)How is the 75% test impacted by the "10% Significance Rule"?

APB Opinion 28 (ASC 270)uses which view of interim reporting?

Forge Company,a calendar-year entity,had 6,000 units in its beginning inventory for 20X8.On December 31,20X7,the units had been adjusted down to $470 per unit from an actual cost of $510 per unit.It was the lower of cost or market.No additional units were purchased during 20X8.The following additional information is provided for 20X8: Forge does not have sufficient experience with the seasonal market for its inventory units and assumes that any reductions in market value during the year will be permanent. -Based on the preceding information,the cost of goods sold for the first quarter is:

Five of eight internally reported operating segments of Rollins Company qualify under the standards set by FASB 131 (ASC 280)for segment reporting.However,the five identified segments do not meet the 75 percent revenue test.FASB 131 (ASC 280)prescribes that management:

In 20X6 and 20X7,each of Putney Company's four operating segments met one of the three quantitative tests for segment reporting.In 20X8,Segment B failed to qualify under the prescribed tests because of abnormal financial conditions.The other three segments qualified for reporting.For 20X8,Segment B:

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 in August to record the sale of the 2,000 units:

Mason Company paid its annual property taxes of $240,000 on February 15,20X9.Mason also anticipates that its annual repairs expense for 20X9 will be $1,200,000.This amount is usually incurred and paid in July and August when operations are shut down so that machinery and equipment can be repaired.What amount should Mason deduct for property taxes and repairs in each quarter for 20X9?

The income tax expense applicable to the second quarter's income statement is determined by:

Collins Company reported consolidated revenue of $120,000,000 in 20X8.Collins operates in two geographic areas,domestic and Asia.The following information pertains to these two areas: What calculation below is correct to determine if the revenue test is satisfied for the Asian operations?

The information below is for the second quarter of Tampa Company for 20X8: Required: Prepare an interim income statement for the second quarter for Tampa Company.Assume the LIFO liquidation is expected to be restored by the end of 20X8.

FASB 131 (ASC 280)requires certain disclosures about major customers.All of the following statements about those disclosures are true with the exception of which statement?

Denver Company,a calendar-year corporation,had the following actual income before income tax expense and estimated effective annual income tax rates for the first three quarters in 20X8: Denver's income tax expense in its interim income statement for the third quarter should be:

Which of the following are established by FASB 131(ASC 280)as "enterprisewide disclosure" standards to provide more information about the risks to a company? I.Information about dominant industry segments. II.Information about major customers. III.Information about geographic areas.

During the third quarter of 20X8,Pride Company sold a piece of equipment at an $8,000 gain.What portion of the gain should Pride report in its income statement for the third quarter of 20X8?

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

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?

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