Introduction:
Segment Reporting:
The reporting policy of the company based on the business or operating segment or geographical coverage of the business is called segment reporting.
Business segment provides information related to individual products and services or group of products and services that are different from other business segments. Geographical segment provides information related to products or services within a particular economic environment that are different from other geographical area.
Segment reporting helps in better understanding of the company, better assessment of risks and returns and enables good comparability that helps in taking appropriate decisions by the management.
Requirement-1:
To identify:
The seven business segments operated by HP from its annual report for the fiscal year ended 2015.
Requirement-2a:
To identify:
The operating segment of HP that had the largest dollar amount of operating income during the fiscal year 2015.
Requirement-2b:
To identify:
The operating segment of HP that had the largest amount of assets during the fiscal year 2015.
Requirement-3a:
To compute:
The return on assets for each business segments for the fiscal year 2015 using the operating income and segment total assets.
Requirement-3b:
To discuss:
The highest return on assets of HP for the fiscal year ended 2015 to measure the profitability of the segment in relation to its total assets.
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Chapter 7 Solutions
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- Selected comparative financial statements of Korbin Company follow. Sales KORBIN COMPANY Comparative Income Statements For Years Ended December 31 2021 2020 $ 512,008 $ 392,240 2019 $ 272,200 Cost of goods sold 308,229 245,542 174,208 Gross profit 203,779 146,698 97,992 Selling expenses 72,705 54,129 35,930 Administrative expenses 46,081 34,517 22,593 Total expenses 118,786 88,646 58,523 Income before taxes .84,993 58,052 39,469 Income tax expense 15,809 11,901 8,012 Net income $ 69,184 $ 46,151 $ 31,457 KORBIN COMPANY Comparative Balance Sheets Assets Current assets Long-term investments Plant assets, net Total assets Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings December 31 2021 2020 2019 $ 54,370 0 $ 36,390 600 $ 48,645 3,870 99,436 90,776 53,339 Total liabilities and equity $ 153,806 $ 127,766 $ 105,854 $ 22,456 $ 19,037 $ 18,524 68,000 68,000 50,000 8,500 8,500 5,556 54,850 32,229 31,774 $ 153,806 $ 127,766 $ 105,854arrow_forwardprovide correct answer mearrow_forwardgeneral accountingarrow_forward
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