Exam 8: Segment and Interim Reporting

The Fratilo Co. had three operating segments with the following information: Pens Sales to outsiders \ 11,200 \ 5,600 \ 8,400 Intersegment revenues 840 1,400 1,960 In addition, revenues generated at corporate headquarters are $1,400. -What is the minimum amount of revenue that each of these segments must earn to be considered separately reportable?

Which of the following statements is true?

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

How should a change from one generally accepted accounting principle to another accepted principle be handled in a third-quarter income statement?

Which of the following statements is false concerning the number of operating segments that should be disclosed?

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

How does a company measure income tax expense to be reported in an interim period?

What is the appropriate treatment in an interim financial report for a LIFO liquidation?

How should contingencies be reported in an interim report?

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). Plastics Metals Lumber Paper Finance Sales to outside parties \ 8,215 \ 2,787 \ 827 \ 451 \ 0 Intersegment revenues transfers 138 170 125 140 0 Interest income from outside parties 0 25 8 0 242 Interest income from intersegment loans 0 0 0 0 207 Operating expenses 5,088 2,096 1,191 753 21 Interest expense 79 21 66 40 113 Tangible assets 1,678 3,882 408 729 135 Intangible assets 94 469 0 62 863 -Prepare the profit or loss test and determine which of these segments was separately reportable. Revenues include sales to outside parties, intersegment revenues transfers, and interest income. Expenses include operating expenses and interest expense.

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?

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

Retro Corp. was engaged solely in manufacturing operations. The following data pertain to the operating segments for 2011: -What is the minimum amount of revenue that each of these segments must earn to be considered separately reportable?

Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2011. 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 2011, compute net income per common share.

Burnside Corp. is organized into four operating segments. The following segment information was generated by the internal reporting system in 2011: 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. Requirements (1) and (2)

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.

Vapor Corporation has a fan products operating segment. Which of the following items does Vapor not have to report for this segment?

Baker Corporation changed from the LIFO method to the FIFO method for inventory valuation during 2011. 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 2011 and that $400,000 net income is earned during the second quarter, how much is reported as net income for the second quarter of 2011?

Which two items of information must be reported for (1) the domestic country, (2) all foreign countries in which the enterprise derives revenues or holds assets, and (3) each foreign country in which a material amount of revenues is earned?

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