Exam 8: Segment and Interim Reporting

The following information for Urbanski Corporation relates to the three months ending June 30, 2013: Urbanski uses the LIFO method to account for inventory, and expects at least 15,000 units to be on hand in the ending inventory at year-end. Purchases made in the last six months are expected to cost an average of $18 per unit. Prepare the journal entries to reflect the sales and cost of goods sold, assuming Urbanski does not expect to replace the liquidated inventory at year-end.

According to U.S. GAAP, what general information about an operating segment needs to be disclosed?

Harrison Company, Inc. began operations on January 1, 2012, and applied the LIFO method for inventory valuation. On June 10, 2013, Harrison adopted the FIFO method of accounting for inventory. Additional information is as follows: The LIFO method was applied during the first quarter of 2013 and the FIFO method was applied during the second quarter of 2013 in computing income, above. Harrison's effective income tax rate is 40 percent. Harrison has 500,000 shares of common stock outstanding at all times. Compute the after-tax effect of Harrison's change in inventory method.

According to U.S. GAAP, what revenues and expenses included in segment profit or loss need to be disclosed?

How should seasonal revenues be reported in an interim financial statement?

Faru Co. identified five industry segments: (1) plastics, (2) metals, (3) lumber, (4) paper, and (5) finance. Each of these segments had been consolidated appropriately by the company in producing its annual financial statements. Information describing each segment is presented below (in thousands).

What is the appropriate treatment in an interim financial report for inventory that has market value below cost?

Which of the following is not true for an operating segment according to U.S. GAAP?

Natarajan, Inc. had the following operating segments, with the indicated amounts of segment revenues and segment expenses: When totaling the revenues to use as the basis for the 75% rule, what is the 75% hurdle that must be exceeded by the revenues of the reportable segments?

For each of the following situations, select the best answer concerning segment disclosures of reportable segments. (A.) Required to be disclosed by an operating segment, but not a geographical segment. (B.) Required to be disclosed by a geographical segment, but not an operating segment. (C.) Required to be disclosed by both an operating segment and a geographical segment. (D.) Not required to be disclosed by either an operating segment or a geographical segment. ___ 1. Factors used to identify segments. ___ 2. Revenues from external customers. ___ 3. Types of products and services from which each segment derives its revenues. ___ 4. Names of major customers. ___ 5. Revenues from transactions with other segments. ___ 6. Interest revenue. ___ 7. Long-lived assets. ___ 8. Discontinued operations and extraordinary items, when applicable. ___ 9. Income tax expense or benefit. ___ 10. Revenues for the domestic country. ___ 11. Cash flow information

Provo, Inc. has an estimated annual tax rate of 35 percent in the first quarter of 2013. Pretax income for the first quarter was $300,000. At the end of the second quarter of 2013, Provo expects the annual tax rate to be 32 percent because of anticipated tax credits. Pretax income for the second quarter was $350,000. Assume no items in either quarter requiring the net-of-tax presentation. How much income tax expense is recognized in the first quarter of 2013?

What is the appropriate treatment in an interim financial report for inventory that has cost below market value?

Which of the following is not a required disclosure in an interim financial report?

What approach is used, according to U.S. GAAP, for determination of how a business is divided into segments?

How should contingencies be reported in an interim report?

The Fratilo Co. had three operating segments with the following information: In addition, revenues generated at corporate headquarters are $1,400. Combined segment revenues are calculated to be

Cement Company, Inc. began the first quarter with 1,000 units of inventory costing $25 per unit. During the first quarter, 3,000 units were purchased at a cost of $40 per unit, and sales of 3,400 units at $65 per units were made. During the second quarter, the company expects to replace the units of beginning inventory sold at a cost of $45 per unit. Cement Company uses the LIFO method to account for inventory. What is the correct journal entry to record cost of goods sold at the end of the first quarter?

Schilling, Inc. has three operating segments with the following information: According to the revenues test, which segment(s) are separately reportable?

Provo, Inc. has an estimated annual tax rate of 35 percent in the first quarter of 2013. Pretax income for the first quarter was $300,000. At the end of the second quarter of 2013, Provo expects the annual tax rate to be 32 percent because of anticipated tax credits. Pretax income for the second quarter was $350,000. Assume no items in either quarter requiring the net-of-tax presentation. How much income tax expense is recognized in the second quarter of 2013?

The hardware operating segment of Bloom Corporation has the following revenues for the year ended December 31, 2013: For purposes of the revenue test, what amount will be used as total revenues of the hardware operating segment?