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Acompany has identified the following operating divisions: Trailers, Saddles, Bridles, and Grooming Gear.  - Which ones of the 4 divisions are operating segments?  - Which segments meet the revenue test?   - Which are segments meet the asset test?

Acompany has identified the following operating divisions: Trailers, Saddles, Bridles, and Grooming Gear.  - Which ones of the 4 divisions are operating segments?  - Which segments meet the revenue test?   - Which are segments meet the asset test?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Acompany has identified the following operating divisions: Trailers, Saddles, Bridles, and Grooming Gear. 

- Which ones of the 4 divisions are operating segments? 

- Which segments meet the revenue test?  

- Which are segments meet the asset test?  

- Which meet the profit & loss test?  

Sales to external customers Interest income from customer Gain on sale of capital assets Loss on sale of capital assets Subtotal - external revenues Intersegment sales Intersegment interest income Total revenues Payroll expenses Selling expenses Administration expenses Deprepciation & amortization Total expenses Operating profit or loss Current Non current assets Total assets Current Liabilities Non current liabilities Total liabilities Net assets Horse Trailers % of Total 7,500 54% 130 62% 2,000 89% (2,500) 100% 7,130 52% 160 42% 10 17% 51% 7,300 3,400 450 800 90 4,740 2,560 1,200 900 2,100 1,100 1,100 1,000 48% 41% 43% 60% 47% 63% 78% 60% 69% 85% 0% 83% 59% Saddles % of Total 5,000 36% 40 5,040 70 30 5,140 2,200 300 600 20 3,120 2,020 100 200 300 20 15 35 265 19% 0% 0% 36% 18% 50% 36% 31% 27% 32% 13% 31% 50% 7% 13% 10% 2% 43% 3% 16% Bridles % of Total 1,200 9% 20 10% 250 11% 0% 11% 29% 17% 11% 1,470 110 10 1,590 1,300 300 400 30 2,030 (440) 200 300 500 150 150 350 18% 27% 22% 20% 20% -11% 13% 20% 17% 12% 0% 11% 21% Grooming Gear 150 20 170 40 10 220 180 50 50 10 290 (70) 30 100 130 25 20 45 85 % of Total 1% 10% 0% 0% 1% 11% 17% 2% 3% 5% 3% 7% 3% -2% 2% 7% 4% 2% 57% 3% 5% Total 13,850 210 2,250 (2,500) 13,810 380 60 14,250 7,080 1,100 1,850 150 10,180 4,070 1,530 1,500 3,030 1,295 35 1,330 1,700
Transcribed Image Text:Sales to external customers Interest income from customer Gain on sale of capital assets Loss on sale of capital assets Subtotal - external revenues Intersegment sales Intersegment interest income Total revenues Payroll expenses Selling expenses Administration expenses Deprepciation & amortization Total expenses Operating profit or loss Current Non current assets Total assets Current Liabilities Non current liabilities Total liabilities Net assets Horse Trailers % of Total 7,500 54% 130 62% 2,000 89% (2,500) 100% 7,130 52% 160 42% 10 17% 51% 7,300 3,400 450 800 90 4,740 2,560 1,200 900 2,100 1,100 1,100 1,000 48% 41% 43% 60% 47% 63% 78% 60% 69% 85% 0% 83% 59% Saddles % of Total 5,000 36% 40 5,040 70 30 5,140 2,200 300 600 20 3,120 2,020 100 200 300 20 15 35 265 19% 0% 0% 36% 18% 50% 36% 31% 27% 32% 13% 31% 50% 7% 13% 10% 2% 43% 3% 16% Bridles % of Total 1,200 9% 20 10% 250 11% 0% 11% 29% 17% 11% 1,470 110 10 1,590 1,300 300 400 30 2,030 (440) 200 300 500 150 150 350 18% 27% 22% 20% 20% -11% 13% 20% 17% 12% 0% 11% 21% Grooming Gear 150 20 170 40 10 220 180 50 50 10 290 (70) 30 100 130 25 20 45 85 % of Total 1% 10% 0% 0% 1% 11% 17% 2% 3% 5% 3% 7% 3% -2% 2% 7% 4% 2% 57% 3% 5% Total 13,850 210 2,250 (2,500) 13,810 380 60 14,250 7,080 1,100 1,850 150 10,180 4,070 1,530 1,500 3,030 1,295 35 1,330 1,700
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