Question

In: Accounting

Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated...

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:

Plastics Metals Lumber Paper Finance
Sales to outside parties $ 6,694 $ 2,354 $ 711 $ 422 $ 0
Intersegment transfers 148 173 138 150 0
Interest income from outside parties 0 34 21 0 42
Interest income from intersegment loans 0 0 0 0 201
Operating expenses 4,214 1,762 1,066 654 31
Interest expense 76 31 66 28 102
Tangible assets 1,501 3,196 524 771 179
Intangible assets 87 403 0 63 0
Intersegment loans (debt) 0 0 0 0 706


Ecru does not allocate its $1,460,000 in common expenses to the various segments.

Perform testing procedures to determine Ecru’s reportable operating segments.

  1. Revenue test:

  2. Profit or loss test:

  3. Asset test:

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