Exam 8: Segment and Interim Reporting

Elektronix, Inc. has three operating segments with the following information: What is the minimum amount of revenue an operating segment must have to be considered a reportable segment?

On February 23, 2013, Cleveland, Inc. paid property taxes of $300,000 for the calendar year 2013.

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. The amount of gross profit for the first quarter is:

Burnside Corp. is organized into four operating segments. The following segment information was generated by the internal reporting system in 2013: Required: 1) What was the profit or loss of each of these segments? 2) Prepare the profit or loss test to determine which of these segments was separately reportable.

All of the following are required to be reported in interim financial statements for a material operating segment except:

When defining a reportable segment, which of the following conditions would be sufficient to allow a company to combine two operating segments for purposes of testing?

What are the two approaches that can be followed in preparing interim reports?

A company that generates reports by both geographic region and product line must consider additional criteria in identifying operating segments when there are multiple sets of reports. Which of the following statement(s) is correct? (I)) An operating segment has a segment manager who is directly accountable to the chief operating decision maker for its financial performance. (II)) If more than one set of organizational units exists, each organizational unit is considered an operating segment even if there is only one set for which segment managers are held responsible. (III.) If segment managers exist for two or more overlapping sets of organizational units, the nature of the business activities must be considered.

What is the purpose of the U.S. GAAP seventy-five percent requirement for industry segment disclosure?

List the five aggregation criteria that need to be considered by management in determining whether business activities and environments are similar.

Elektronix, Inc. has three operating segments with the following information: What is the minimum amount of assets an operating segment must have to be considered a reportable segment?

Which of the following operating segment disclosures is not required by U.S. GAAP?

Which of the following items of information are required to be included in interim reports for each operating segment? (I)) Revenues from external customers (II)) Segment profit or loss (III.) Reconciliation of segment profit or loss to the enterprise's total income before taxes (IV)) Intersegment revenues

Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2013. Baker has an effective income tax rate of 30 percent and 100,000 shares of common stock issued and outstanding. The following additional information is available: Assuming Baker makes the change in the first quarter of 2013 and that $400,000 net income is earned during the second quarter, how much is reported as net income for the second quarter of 2013?

The following items are required to be disclosed for each operating segment except:

Gregor Inc. uses the LIFO cost-flow assumption to value inventory. Inventory for Gregor on January 1, 2013 was 100 units at a LIFO cost of $25 per unit. During the first quarter of 2013, 200 units were purchased costing an average of $40 per unit, and sales of 265 units at a retail price of $50 per unit were made. Assuming Gregor does not expect to replace the units of beginning inventory sold, what is the amount of cost of goods sold for the quarter ended March 31, 2013?

On February 23, 2013, Cleveland, Inc. paid property taxes of $300,000 for the calendar year 2013. Prepare the journal entry for the payment of property taxes on February 23, 2013.

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). Prepare the revenue test and determine which of these segments was separately reportable. Revenues include sales to outside parties, intersegment revenues transfers, and interest income.

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands): In applying the profit or loss test, what is the minimum amount an operating segment must have in order to meet the profit or loss test for a reportable segment?

For companies that provide quarterly reports, how is the fourth quarter reported?