Enterprise disclosures: ASC 280 provides guidelines for enterprise wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements. The segmental disclosure worksheet and schedule showing which segment is reportable.

Question

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Answer 1

Question

Chapter 13, Problem 13.13P

a

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The segmental disclosure worksheet and schedule showing which segment is reportable.

a

Expert Solution

Answer to Problem 13.13P

Profit as per segment disclosure worksheet

A. $78,000, B. $33,500, C. $50,100 and D. Loss of $13,600

Segment A, B, and C are separately reportable as it passes 10 percent test.

Explanation of Solution

1. Segment disclosure worksheet:

	Operating Segments				Corporate admin $		Intersegment eliminations $	Consolidated $
	A $	B $	C $	D $	Corporate admin $	Combined $	Intersegment eliminations $	Consolidated $
Revenues:
Sales:
Non-affiliate	280,000	130,000	340,000	60,000		810,000		810,000
Intersegment.	60,000		18,000	12,000		90,000	(90,000)
Total revenue	340,000	130,000	358,000	72,000		900,000	(90,000)	810,000
Operating Costs:
Traceable	(245,000)	(90,000)	(290,000)	(82,000)		(707,000)	90,000	(617,000)
Allocated	(17,000)	(6,500)	(17,900)	(3,600)		(45,000)		(45,000)
Profit / loss	78,000	33,500	50,100	(13,600)		148,000	0	148,000
Other items:
General expenses					(20,000)	(20,000)		(20,000)
Income from continuing operations	78,000	33,500	50,100	(13,600)	(20,000)	128,000	0	128,000

Assets:
Segments	400,000	105,000	500,000	75,000		1,080,000		1,080,000
General corporate					120,000	120,000		120,000
Total Assets	400,000	105,000	500,000	75,000	120,000	1,200,000		1,200,000

Allocated costs:

A = ($340,000 / $900,000) × $45,000=$17,000

B = ($130,000 / $900,000) × $45,000=$6,500

C = ($358,000 / $900,000) × $45,000=$17,900

D = ($72,000 / $900,000) × $45,000=$3,600

2. Schedule showing reportable segments.

Segment is reportable if segment revenue is greater than or equal to 10 percent

	Revenue			Profit			Assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	78	53	Yes	400	37	Yes
B	130	16	Yes	33.5	22	Yes	105	10	Yes
C	340	42	Yes	50.1	34	Yes	500	46	Yes
D	60	7	No	(13.6)	-9	No	75	7	No
Total	810	100		148	100		1,080	100

Segment D does not qualify 10 percent test, hence not reportable. All other segments A, B, C are reportable.

b

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The schedule showing which geographical areas are reportable when Division A is in domestic area, and each of the other divisions operates in separate foreign country.

b

Expert Solution

Answer to Problem 13.13P

Domestic Segment A and Foreign Segment B and C are separately reportable.

Explanation of Solution

Schedule showing reportable segments (10 percent materiality test is applied to check the reportibiliy)

Segment is reportable if segment revenue is greater than or equal to 10 percent.

	Revenue			Long − lived assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	200	37	Yes
B	130	16	Yes	52.5	10	Yes
C	340	42	Yes	250	46.3	Yes
D	60	7	No	37.5	7	No
Total	810	100		540	100

Domestic Segment A and Foreign Segment B and C are separately reportable.

c

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The amount of sales to an outside customer that would cause that customer to be classified as a major customer.

c

Expert Solution

Answer to Problem 13.13P

The amount of sales that would classify a customer as a major customer is $81,000.

Explanation of Solution

ASC 280 does not provide any separate materiality test for the classification of a major customer, but most of the corporate use a 10 percent materiality test to classify major customers.

In the case of P, the sales greater or equal to $81,000 to a single customer would be regarded as major customer $81,000 = $810,000 × .10

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Students have asked these similar questions

Windmill Corp. has three manufacturing divisions, each of which has been Determined to be reportable segment. Common costs are appropriately allocated on the basis of each division’s sales in relation to Windmill’s aggregate sales. In the current year, Division 1 had sales of P6,000,000, which was 20%of Windmill’s total sales, and had traceable cost of P3,800,00. Windmill incurred operating cost of P1,000,000 that were not directly traceable to any of the divisions. In addition, Windmill incurred interest expense of P600,000. In reporting segment information, what amount should be shown as operating profit of Division 1 for the current year?

White has a reportable segment if the segment’s revenue will total to what amount?

The sales, income from operations, and invested assets for each division of Grosbeak Company are as follows: Sales Income fromOperations InvestedAssets Division E $5,000,000 $550,000 $2,400,000 Division F 4,800,000 860,000 2,500,000 Division G 7,000,000 860,000 2,900,000 a. Using the DuPont formula, determine the profit margin, investment turnover, and rate of return on investment for each division. Round profit margin to two decimal places, investment turnover to four decimal places and rate of return on investment to one decimal place. Division E Division F Division G Profit Margin % % % Investment Turnover Rate of return on investment % % % b. Which division is the most profitable per dollar invested?

Answer 2

Question

Chapter 13, Problem 13.13P

a

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The segmental disclosure worksheet and schedule showing which segment is reportable.

a

Expert Solution

Answer to Problem 13.13P

Profit as per segment disclosure worksheet

A. $78,000, B. $33,500, C. $50,100 and D. Loss of $13,600

Segment A, B, and C are separately reportable as it passes 10 percent test.

Explanation of Solution

1. Segment disclosure worksheet:

	Operating Segments				Corporate admin $		Intersegment eliminations $	Consolidated $
	A $	B $	C $	D $	Corporate admin $	Combined $	Intersegment eliminations $	Consolidated $
Revenues:
Sales:
Non-affiliate	280,000	130,000	340,000	60,000		810,000		810,000
Intersegment.	60,000		18,000	12,000		90,000	(90,000)
Total revenue	340,000	130,000	358,000	72,000		900,000	(90,000)	810,000
Operating Costs:
Traceable	(245,000)	(90,000)	(290,000)	(82,000)		(707,000)	90,000	(617,000)
Allocated	(17,000)	(6,500)	(17,900)	(3,600)		(45,000)		(45,000)
Profit / loss	78,000	33,500	50,100	(13,600)		148,000	0	148,000
Other items:
General expenses					(20,000)	(20,000)		(20,000)
Income from continuing operations	78,000	33,500	50,100	(13,600)	(20,000)	128,000	0	128,000

Assets:
Segments	400,000	105,000	500,000	75,000		1,080,000		1,080,000
General corporate					120,000	120,000		120,000
Total Assets	400,000	105,000	500,000	75,000	120,000	1,200,000		1,200,000

Allocated costs:

A = ($340,000 / $900,000) × $45,000=$17,000

B = ($130,000 / $900,000) × $45,000=$6,500

C = ($358,000 / $900,000) × $45,000=$17,900

D = ($72,000 / $900,000) × $45,000=$3,600

2. Schedule showing reportable segments.

Segment is reportable if segment revenue is greater than or equal to 10 percent

	Revenue			Profit			Assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	78	53	Yes	400	37	Yes
B	130	16	Yes	33.5	22	Yes	105	10	Yes
C	340	42	Yes	50.1	34	Yes	500	46	Yes
D	60	7	No	(13.6)	-9	No	75	7	No
Total	810	100		148	100		1,080	100

Segment D does not qualify 10 percent test, hence not reportable. All other segments A, B, C are reportable.

b

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The schedule showing which geographical areas are reportable when Division A is in domestic area, and each of the other divisions operates in separate foreign country.

b

Expert Solution

Answer to Problem 13.13P

Domestic Segment A and Foreign Segment B and C are separately reportable.

Explanation of Solution

Schedule showing reportable segments (10 percent materiality test is applied to check the reportibiliy)

Segment is reportable if segment revenue is greater than or equal to 10 percent.

	Revenue			Long − lived assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	200	37	Yes
B	130	16	Yes	52.5	10	Yes
C	340	42	Yes	250	46.3	Yes
D	60	7	No	37.5	7	No
Total	810	100		540	100

Domestic Segment A and Foreign Segment B and C are separately reportable.

c

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The amount of sales to an outside customer that would cause that customer to be classified as a major customer.

c

Expert Solution

Answer to Problem 13.13P

The amount of sales that would classify a customer as a major customer is $81,000.

Explanation of Solution

ASC 280 does not provide any separate materiality test for the classification of a major customer, but most of the corporate use a 10 percent materiality test to classify major customers.

In the case of P, the sales greater or equal to $81,000 to a single customer would be regarded as major customer $81,000 = $810,000 × .10

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Answer 3

Question

Chapter 13, Problem 13.13P

a

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The segmental disclosure worksheet and schedule showing which segment is reportable.

a

Expert Solution

Answer to Problem 13.13P

Profit as per segment disclosure worksheet

A. $78,000, B. $33,500, C. $50,100 and D. Loss of $13,600

Segment A, B, and C are separately reportable as it passes 10 percent test.

Explanation of Solution

1. Segment disclosure worksheet:

	Operating Segments				Corporate admin $		Intersegment eliminations $	Consolidated $
	A $	B $	C $	D $	Corporate admin $	Combined $	Intersegment eliminations $	Consolidated $
Revenues:
Sales:
Non-affiliate	280,000	130,000	340,000	60,000		810,000		810,000
Intersegment.	60,000		18,000	12,000		90,000	(90,000)
Total revenue	340,000	130,000	358,000	72,000		900,000	(90,000)	810,000
Operating Costs:
Traceable	(245,000)	(90,000)	(290,000)	(82,000)		(707,000)	90,000	(617,000)
Allocated	(17,000)	(6,500)	(17,900)	(3,600)		(45,000)		(45,000)
Profit / loss	78,000	33,500	50,100	(13,600)		148,000	0	148,000
Other items:
General expenses					(20,000)	(20,000)		(20,000)
Income from continuing operations	78,000	33,500	50,100	(13,600)	(20,000)	128,000	0	128,000

Assets:
Segments	400,000	105,000	500,000	75,000		1,080,000		1,080,000
General corporate					120,000	120,000		120,000
Total Assets	400,000	105,000	500,000	75,000	120,000	1,200,000		1,200,000

Allocated costs:

A = ($340,000 / $900,000) × $45,000=$17,000

B = ($130,000 / $900,000) × $45,000=$6,500

C = ($358,000 / $900,000) × $45,000=$17,900

D = ($72,000 / $900,000) × $45,000=$3,600

2. Schedule showing reportable segments.

Segment is reportable if segment revenue is greater than or equal to 10 percent

	Revenue			Profit			Assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	78	53	Yes	400	37	Yes
B	130	16	Yes	33.5	22	Yes	105	10	Yes
C	340	42	Yes	50.1	34	Yes	500	46	Yes
D	60	7	No	(13.6)	-9	No	75	7	No
Total	810	100		148	100		1,080	100

Segment D does not qualify 10 percent test, hence not reportable. All other segments A, B, C are reportable.

b

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The schedule showing which geographical areas are reportable when Division A is in domestic area, and each of the other divisions operates in separate foreign country.

b

Expert Solution

Answer to Problem 13.13P

Domestic Segment A and Foreign Segment B and C are separately reportable.

Explanation of Solution

Schedule showing reportable segments (10 percent materiality test is applied to check the reportibiliy)

Segment is reportable if segment revenue is greater than or equal to 10 percent.

	Revenue			Long − lived assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	200	37	Yes
B	130	16	Yes	52.5	10	Yes
C	340	42	Yes	250	46.3	Yes
D	60	7	No	37.5	7	No
Total	810	100		540	100

Domestic Segment A and Foreign Segment B and C are separately reportable.

c

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The amount of sales to an outside customer that would cause that customer to be classified as a major customer.

c

Expert Solution

Answer to Problem 13.13P

The amount of sales that would classify a customer as a major customer is $81,000.

Explanation of Solution

ASC 280 does not provide any separate materiality test for the classification of a major customer, but most of the corporate use a 10 percent materiality test to classify major customers.

In the case of P, the sales greater or equal to $81,000 to a single customer would be regarded as major customer $81,000 = $810,000 × .10

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Answer 4

Question

Chapter 13, Problem 13.13P

a

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The segmental disclosure worksheet and schedule showing which segment is reportable.

a

Expert Solution

Answer to Problem 13.13P

Profit as per segment disclosure worksheet

A. $78,000, B. $33,500, C. $50,100 and D. Loss of $13,600

Segment A, B, and C are separately reportable as it passes 10 percent test.

Explanation of Solution

1. Segment disclosure worksheet:

	Operating Segments				Corporate admin $		Intersegment eliminations $	Consolidated $
	A $	B $	C $	D $	Corporate admin $	Combined $	Intersegment eliminations $	Consolidated $
Revenues:
Sales:
Non-affiliate	280,000	130,000	340,000	60,000		810,000		810,000
Intersegment.	60,000		18,000	12,000		90,000	(90,000)
Total revenue	340,000	130,000	358,000	72,000		900,000	(90,000)	810,000
Operating Costs:
Traceable	(245,000)	(90,000)	(290,000)	(82,000)		(707,000)	90,000	(617,000)
Allocated	(17,000)	(6,500)	(17,900)	(3,600)		(45,000)		(45,000)
Profit / loss	78,000	33,500	50,100	(13,600)		148,000	0	148,000
Other items:
General expenses					(20,000)	(20,000)		(20,000)
Income from continuing operations	78,000	33,500	50,100	(13,600)	(20,000)	128,000	0	128,000

Assets:
Segments	400,000	105,000	500,000	75,000		1,080,000		1,080,000
General corporate					120,000	120,000		120,000
Total Assets	400,000	105,000	500,000	75,000	120,000	1,200,000		1,200,000

Allocated costs:

A = ($340,000 / $900,000) × $45,000=$17,000

B = ($130,000 / $900,000) × $45,000=$6,500

C = ($358,000 / $900,000) × $45,000=$17,900

D = ($72,000 / $900,000) × $45,000=$3,600

2. Schedule showing reportable segments.

Segment is reportable if segment revenue is greater than or equal to 10 percent

	Revenue			Profit			Assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	78	53	Yes	400	37	Yes
B	130	16	Yes	33.5	22	Yes	105	10	Yes
C	340	42	Yes	50.1	34	Yes	500	46	Yes
D	60	7	No	(13.6)	-9	No	75	7	No
Total	810	100		148	100		1,080	100

Segment D does not qualify 10 percent test, hence not reportable. All other segments A, B, C are reportable.

b

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The schedule showing which geographical areas are reportable when Division A is in domestic area, and each of the other divisions operates in separate foreign country.

b

Expert Solution

Answer to Problem 13.13P

Domestic Segment A and Foreign Segment B and C are separately reportable.

Explanation of Solution

Schedule showing reportable segments (10 percent materiality test is applied to check the reportibiliy)

Segment is reportable if segment revenue is greater than or equal to 10 percent.

	Revenue			Long − lived assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	200	37	Yes
B	130	16	Yes	52.5	10	Yes
C	340	42	Yes	250	46.3	Yes
D	60	7	No	37.5	7	No
Total	810	100		540	100

Domestic Segment A and Foreign Segment B and C are separately reportable.

c

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The amount of sales to an outside customer that would cause that customer to be classified as a major customer.

c

Expert Solution

Answer to Problem 13.13P

The amount of sales that would classify a customer as a major customer is $81,000.

Explanation of Solution

ASC 280 does not provide any separate materiality test for the classification of a major customer, but most of the corporate use a 10 percent materiality test to classify major customers.

In the case of P, the sales greater or equal to $81,000 to a single customer would be regarded as major customer $81,000 = $810,000 × .10

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Answer 5

Chapter 13, Problem 13.13P

a

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The segmental disclosure worksheet and schedule showing which segment is reportable.

a

Expert Solution

Answer to Problem 13.13P

Profit as per segment disclosure worksheet

A. $78,000, B. $33,500, C. $50,100 and D. Loss of $13,600

Segment A, B, and C are separately reportable as it passes 10 percent test.

Explanation of Solution

1. Segment disclosure worksheet:

	Operating Segments				Corporate admin $		Intersegment eliminations $	Consolidated $
	A $	B $	C $	D $	Corporate admin $	Combined $	Intersegment eliminations $	Consolidated $
Revenues:
Sales:
Non-affiliate	280,000	130,000	340,000	60,000		810,000		810,000
Intersegment.	60,000		18,000	12,000		90,000	(90,000)
Total revenue	340,000	130,000	358,000	72,000		900,000	(90,000)	810,000
Operating Costs:
Traceable	(245,000)	(90,000)	(290,000)	(82,000)		(707,000)	90,000	(617,000)
Allocated	(17,000)	(6,500)	(17,900)	(3,600)		(45,000)		(45,000)
Profit / loss	78,000	33,500	50,100	(13,600)		148,000	0	148,000
Other items:
General expenses					(20,000)	(20,000)		(20,000)
Income from continuing operations	78,000	33,500	50,100	(13,600)	(20,000)	128,000	0	128,000

Assets:
Segments	400,000	105,000	500,000	75,000		1,080,000		1,080,000
General corporate					120,000	120,000		120,000
Total Assets	400,000	105,000	500,000	75,000	120,000	1,200,000		1,200,000

Allocated costs:

A = ($340,000 / $900,000) × $45,000=$17,000

B = ($130,000 / $900,000) × $45,000=$6,500

C = ($358,000 / $900,000) × $45,000=$17,900

D = ($72,000 / $900,000) × $45,000=$3,600

2. Schedule showing reportable segments.

Segment is reportable if segment revenue is greater than or equal to 10 percent

	Revenue			Profit			Assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	78	53	Yes	400	37	Yes
B	130	16	Yes	33.5	22	Yes	105	10	Yes
C	340	42	Yes	50.1	34	Yes	500	46	Yes
D	60	7	No	(13.6)	-9	No	75	7	No
Total	810	100		148	100		1,080	100

Segment D does not qualify 10 percent test, hence not reportable. All other segments A, B, C are reportable.

b

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The schedule showing which geographical areas are reportable when Division A is in domestic area, and each of the other divisions operates in separate foreign country.

b

Expert Solution

Answer to Problem 13.13P

Domestic Segment A and Foreign Segment B and C are separately reportable.

Explanation of Solution

Schedule showing reportable segments (10 percent materiality test is applied to check the reportibiliy)

Segment is reportable if segment revenue is greater than or equal to 10 percent.

	Revenue			Long − lived assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	200	37	Yes
B	130	16	Yes	52.5	10	Yes
C	340	42	Yes	250	46.3	Yes
D	60	7	No	37.5	7	No
Total	810	100		540	100

Domestic Segment A and Foreign Segment B and C are separately reportable.

c

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The amount of sales to an outside customer that would cause that customer to be classified as a major customer.

c

Expert Solution

Answer to Problem 13.13P

The amount of sales that would classify a customer as a major customer is $81,000.

Explanation of Solution

ASC 280 does not provide any separate materiality test for the classification of a major customer, but most of the corporate use a 10 percent materiality test to classify major customers.

In the case of P, the sales greater or equal to $81,000 to a single customer would be regarded as major customer $81,000 = $810,000 × .10

Answer 6

Chapter 13, Problem 13.13P

a

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The segmental disclosure worksheet and schedule showing which segment is reportable.

a

Expert Solution

Answer to Problem 13.13P

Profit as per segment disclosure worksheet

A. $78,000, B. $33,500, C. $50,100 and D. Loss of $13,600

Segment A, B, and C are separately reportable as it passes 10 percent test.

Explanation of Solution

1. Segment disclosure worksheet:

	Operating Segments				Corporate admin $		Intersegment eliminations $	Consolidated $
	A $	B $	C $	D $	Corporate admin $	Combined $	Intersegment eliminations $	Consolidated $
Revenues:
Sales:
Non-affiliate	280,000	130,000	340,000	60,000		810,000		810,000
Intersegment.	60,000		18,000	12,000		90,000	(90,000)
Total revenue	340,000	130,000	358,000	72,000		900,000	(90,000)	810,000
Operating Costs:
Traceable	(245,000)	(90,000)	(290,000)	(82,000)		(707,000)	90,000	(617,000)
Allocated	(17,000)	(6,500)	(17,900)	(3,600)		(45,000)		(45,000)
Profit / loss	78,000	33,500	50,100	(13,600)		148,000	0	148,000
Other items:
General expenses					(20,000)	(20,000)		(20,000)
Income from continuing operations	78,000	33,500	50,100	(13,600)	(20,000)	128,000	0	128,000

Assets:
Segments	400,000	105,000	500,000	75,000		1,080,000		1,080,000
General corporate					120,000	120,000		120,000
Total Assets	400,000	105,000	500,000	75,000	120,000	1,200,000		1,200,000

Allocated costs:

A = ($340,000 / $900,000) × $45,000=$17,000

B = ($130,000 / $900,000) × $45,000=$6,500

C = ($358,000 / $900,000) × $45,000=$17,900

D = ($72,000 / $900,000) × $45,000=$3,600

2. Schedule showing reportable segments.

Segment is reportable if segment revenue is greater than or equal to 10 percent

	Revenue			Profit			Assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	78	53	Yes	400	37	Yes
B	130	16	Yes	33.5	22	Yes	105	10	Yes
C	340	42	Yes	50.1	34	Yes	500	46	Yes
D	60	7	No	(13.6)	-9	No	75	7	No
Total	810	100		148	100		1,080	100

Segment D does not qualify 10 percent test, hence not reportable. All other segments A, B, C are reportable.

Answer 7

Chapter 13, Problem 13.13P

a

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The segmental disclosure worksheet and schedule showing which segment is reportable.

Answer 8

a

Expert Solution

Answer to Problem 13.13P

Profit as per segment disclosure worksheet

A. $78,000, B. $33,500, C. $50,100 and D. Loss of $13,600

Segment A, B, and C are separately reportable as it passes 10 percent test.

Answer 9

a

Expert Solution

Answer 10

a

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

1. Segment disclosure worksheet:

	Operating Segments				Corporate admin $		Intersegment eliminations $	Consolidated $
	A $	B $	C $	D $	Corporate admin $	Combined $	Intersegment eliminations $	Consolidated $
Revenues:
Sales:
Non-affiliate	280,000	130,000	340,000	60,000		810,000		810,000
Intersegment.	60,000		18,000	12,000		90,000	(90,000)
Total revenue	340,000	130,000	358,000	72,000		900,000	(90,000)	810,000
Operating Costs:
Traceable	(245,000)	(90,000)	(290,000)	(82,000)		(707,000)	90,000	(617,000)
Allocated	(17,000)	(6,500)	(17,900)	(3,600)		(45,000)		(45,000)
Profit / loss	78,000	33,500	50,100	(13,600)		148,000	0	148,000
Other items:
General expenses					(20,000)	(20,000)		(20,000)
Income from continuing operations	78,000	33,500	50,100	(13,600)	(20,000)	128,000	0	128,000

Assets:
Segments	400,000	105,000	500,000	75,000		1,080,000		1,080,000
General corporate					120,000	120,000		120,000
Total Assets	400,000	105,000	500,000	75,000	120,000	1,200,000		1,200,000

Allocated costs:

A = ($340,000 / $900,000) × $45,000=$17,000

B = ($130,000 / $900,000) × $45,000=$6,500

C = ($358,000 / $900,000) × $45,000=$17,900

D = ($72,000 / $900,000) × $45,000=$3,600

2. Schedule showing reportable segments.

Segment is reportable if segment revenue is greater than or equal to 10 percent

	Revenue			Profit			Assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	78	53	Yes	400	37	Yes
B	130	16	Yes	33.5	22	Yes	105	10	Yes
C	340	42	Yes	50.1	34	Yes	500	46	Yes
D	60	7	No	(13.6)	-9	No	75	7	No
Total	810	100		148	100		1,080	100

Segment D does not qualify 10 percent test, hence not reportable. All other segments A, B, C are reportable.

Answer 13

b

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The schedule showing which geographical areas are reportable when Division A is in domestic area, and each of the other divisions operates in separate foreign country.

b

Expert Solution

Answer to Problem 13.13P

Domestic Segment A and Foreign Segment B and C are separately reportable.

Explanation of Solution

Schedule showing reportable segments (10 percent materiality test is applied to check the reportibiliy)

Segment is reportable if segment revenue is greater than or equal to 10 percent.

	Revenue			Long − lived assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	200	37	Yes
B	130	16	Yes	52.5	10	Yes
C	340	42	Yes	250	46.3	Yes
D	60	7	No	37.5	7	No
Total	810	100		540	100

Domestic Segment A and Foreign Segment B and C are separately reportable.

Answer 14

b

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The schedule showing which geographical areas are reportable when Division A is in domestic area, and each of the other divisions operates in separate foreign country.

Answer 15

b

Expert Solution

Answer to Problem 13.13P

Domestic Segment A and Foreign Segment B and C are separately reportable.

Answer 16

b

Expert Solution

Answer 17

b

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Schedule showing reportable segments (10 percent materiality test is applied to check the reportibiliy)

Segment is reportable if segment revenue is greater than or equal to 10 percent.

	Revenue			Long − lived assets
Segment	$,(000’s)	%	Reportable	$,(000’s)	%	Reportable
A	280	35	Yes	200	37	Yes
B	130	16	Yes	52.5	10	Yes
C	340	42	Yes	250	46.3	Yes
D	60	7	No	37.5	7	No
Total	810	100		540	100

Domestic Segment A and Foreign Segment B and C are separately reportable.

Answer 20

c

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The amount of sales to an outside customer that would cause that customer to be classified as a major customer.

c

Expert Solution

Answer to Problem 13.13P

The amount of sales that would classify a customer as a major customer is $81,000.

Explanation of Solution

ASC 280 does not provide any separate materiality test for the classification of a major customer, but most of the corporate use a 10 percent materiality test to classify major customers.

In the case of P, the sales greater or equal to $81,000 to a single customer would be regarded as major customer $81,000 = $810,000 × .10

Answer 21

c

To determine

Enterprise disclosures: ASC 280 provides guidelines for enterprise-wide disclosures in financial statements to help users to understand risk and potential return. ASC 280 established the term enterprise-wide disclosure standards to provide users more information about the company’s risks. These disclosures are typically made in a footnote to the financial statements.

The amount of sales to an outside customer that would cause that customer to be classified as a major customer.

Answer 22

c

Expert Solution

Answer to Problem 13.13P

The amount of sales that would classify a customer as a major customer is $81,000.

Answer 23

c

Expert Solution

Answer 24

c

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

ASC 280 does not provide any separate materiality test for the classification of a major customer, but most of the corporate use a 10 percent materiality test to classify major customers.

In the case of P, the sales greater or equal to $81,000 to a single customer would be regarded as major customer $81,000 = $810,000 × .10