Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows: (see screen shot) Ecru does not allocate its $1,480,000 in common expenses to the various segments. Perform testing procedures to determine Ecru’s reportable operating segments. Revenue test: Profit or loss test: Asset test:
Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows: (see screen shot) Ecru does not allocate its $1,480,000 in common expenses to the various segments. Perform testing procedures to determine Ecru’s reportable operating segments. Revenue test: Profit or loss test: Asset test:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance.
It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows:
(see screen shot)
Ecru does not allocate its $1,480,000 in common expenses to the various segments.
Perform testing procedures to determine Ecru’s reportable operating segments.
-
Revenue test:
-
Profit or loss test:
-
Asset test:
Transcribed Image Text:A
Sales to outside parties
Intersegment transfers
Interest income from outside parties
Interest income from intersegment loans
Operating expenses
Interest expense
Tangible assets
Intangible assets
Intersegment loans (debt)
B
Plastics
6,625
146
0
0
4,174
74
1,467
85
0
C
Metals
2,334
169
32
0
1,742
29
3,176
399
0
D
Lumber
701
134
19
0
1,046
64
504
0
0
E
Paper
412
146
0
0
644
30
751
61
0
F
Finance
0
0
40
197
29
100
169
0
702
G
Transcribed Image Text:Segment
Plastics
Metals
Lumber
Paper
Finance
Total
Revenues
Percentage
%
%
%
%
%
%
Reported or Not
Reported
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