Exam 8: Segment and Interim Reporting

On February 23, 2011, Cleveland, Inc., paid property taxes of $300,000 for the calendar year 2011. -Prepare the journal entry for the payment of property taxes on February 23, 2011.

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

The following information for Urbanski Corporation relates to the three months ending June 30, 2011: Answer: 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.

Which tests must a company use to determine which operating segments require separate disclosure?

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

Which of the following statements is true according to U.S. GAAP regarding segment or enterprise-wide disclosure?

Which of the following is false with regard to accounting standards for segment reporting according to International Financial Reporting Standards (IFRS) and U.S. GAAP?

Which of the following statements is true regarding the reporting of revenues in an interim report?

Gregor, Inc., uses the LIFO cost-flow assumption to value inventory. Inventory for Gregor on January 1, 2011 was 100 units at a LIFO cost of $25 per unit. During the first quarter of 2011, 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 expects to replace the units of beginning inventory sold before the year-end at a cost of $41, what is the amount of cost of goods sold for the quarter ended March 31, 2011?

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 asset test and determine which of these segments was separately reportable.

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?

What related items need to be disclosed in regard to total segment assets?

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

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, how much is reported as net income for the first quarter of 2010?

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

Peterson Corporation has three operating segments with the following information: -What amount of revenues must be generated from one customer before that party must be identified as a major customer?

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

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

Whitley Corporation identified four operating segments: Automotive, Electrical, Lawn Equipment, and Sporting Goods. Automotive met the revenue test and the profit or loss test. Electrical met all three tests. Lawn Equipment met only the asset test. Sporting Goods did not meet any of the three tests. Which of these segments must be disclosed separately? Automotive Electrical Lawn Equipment Sporting Goods A) Yes Yes Yes Yes B) No Yes No No C) Yes Yes Yes No D) Yes Yes No No E) No No No Yes

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, how much is reported as net income for the first quarter of 2011?