Exam 13: Segment and Interim Reporting

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.

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:

Trevor Company discloses supplementary operating segment information for its three reportable segments.Data for 20X8 are available as follows: Allocable costs for the year was $180,000.Allocable costs are assigned based on the ratio of a segment's income before allocable costs to total income before allocable costs.The 20X8 operating profit for Segment B was:

Forge Company,a calendar-year entity,had 6,000 units in its beginning inventory for 20X8.On December 31,20X7,applying the lower-of-cost-or-market (NRV)principle,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 (NRV).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 second quarter is:

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?

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:

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:

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.

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

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?

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.

Trevor Company discloses supplementary operating segment information for its three reportable segments.Data for 20X8 are available as follows: Additional 20X8 expenses include indirect operating expenses of $200,000.Appropriately selected common indirect operating expenses are allocated to segments based on the ratio of each segment's sales to total sales.The 20X8 operating profit for Segment B was:

An analysis of Abbey Company's operating segments provides the following information: -Refer to the above information.Which of the operating segments above meet the revenue test?

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?

Tyler Company incurred an inventory loss due to a decline in net realizable value (NRV)during its first quarter of operations in 20X8.At the end of the first quarter,management of the company believed the decline in NRV to be permanent.In the second quarter,the NRV of Tyler's inventories increased above their acquisition cost.NRV 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?

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?

An analysis of Abbey Company's operating segments provides the following information: -Refer to the above information.Which of the operating segments above meet the operating profit (loss)test?

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

Crisfield Company has two reportable segments,C and D.Segment C made $4,000,000 of sales to external customers and $400,000 of sales to other operating segments.Segment D,on the other hand,made sales of $8,000,000 to external customers and $1,600,000 of sales to other operating segments.Crisfield Company reported $13,200,000 of revenues on its consolidated income statement.What calculation below correctly determines whether Crisfield Company's reportable segments satisfy the 75% revenue test?

Cherokee Company reported consolidated revenue of $90,000,000 in 20X5.Cherokee operates in two geographic areas,domestic and Europe.The following information pertains to these two areas: What calculation below is correct to determine if the revenue test is satisfied for the European operations?