Advanced Accounting 12th Edition by Joe Ben Hoyle,Thomas Schaefer , Timothy Doupnik

Exercise 14

Medford Company has seven operating segments but only four (G, H, I, and J) are of significant size to warrant separate disclosure. As a whole, the segments generated revenues of $710,000 ($520,000 + $190,000) from outside parties. In addition, the segments had $260,000 in intersegment transfers ($220,000 + $40,000).

Which of the following statements is true
a. A sufficient number of segments are being reported because those segments have $740,000 in revenues of a total of $970,000 for the company as a whole.
b. Not enough segments are being reported because those segments have $520,000 in outside sales of a total of $710,000 for the company as a whole.
c. Not enough segments are being reported because those segments have $740,000 in revenues of a total of $970,000 for the company as a whole.
d. A sufficient number of segments are being reported because those segments have $520,000 in outside sales of a total of $710,000 for the company as a whole.