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: 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) Plastics $ 6,805 159 8 8 4,294 80 1,527 91 0 Metals $ 2,394 181 38 0 1,802 35 3,236 411 0 Lumber $ 731 146 25 0 1,106 70 564 0 0 Ecru does not allocate its $1,420,000 in common expenses to the various segments. Paper $ 442 158 0 0 674 24 811 67 0 Finance $ 0 0 46 209 35 106 199 8 714

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Question

subject;accounting

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:
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)
Plastics
$ 6,805
159
8
a. Revenue test:
b. Profit or loss test:
c. Asset test:
8
4,294
88
1,527
91
8
Metals Lumber
$ 2,394 $ 731
181
146
38
25
8
1,802
35
3,236
411
8
1,196
70
564
8
8
Ecru does not allocate its $1,420,000 in common expenses to the various segments.
Perform testing procedures to determine Ecru's reportable operating segments.
Paper
$ 442
158
8
8
674
24
811
67
8
Finance
$
8
46
209
35
106
199
8
714
Transcribed Image Text: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: 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) Plastics $ 6,805 159 8 a. Revenue test: b. Profit or loss test: c. Asset test: 8 4,294 88 1,527 91 8 Metals Lumber $ 2,394 $ 731 181 146 38 25 8 1,802 35 3,236 411 8 1,196 70 564 8 8 Ecru does not allocate its $1,420,000 in common expenses to the various segments. Perform testing procedures to determine Ecru's reportable operating segments. Paper $ 442 158 8 8 674 24 811 67 8 Finance $ 8 46 209 35 106 199 8 714
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