Question

West Corporation reported the following consolidated data for 20X2:

Sales	$	801,000
Consolidated income before taxes		138,000
Total assets		1,300,000

Data reported for West’s four operating divisions are as follows:

	Division A			Division B			Division C			Division D
Sales to outsiders	$	270,000		$	150,000		$	330,000		$	51,000
Intersegment sales		62,000						16,000			21,000
Traceable costs		255,000			100,000			300,000			92,000
Assets		491,000			115,000			510,000			85,000

Intersegment sales are priced at cost, and all goods have been subsequently sold to nonaffiliates. Some joint production costs are allocated to the divisions based on total sales. These joint costs were $45,000 in 20X2. The company’s corporate center had $30,000 of general corporate expenses and $130,000 of assets that the chief operating decision maker did not use in making the decision regarding the operating segments.

Required: Each of the following items is unrelated to the others. The divisions are industry segments. Prepare a segmental disclosure worksheet for the company. (Do not round your intermediate calculations.) Operating Segments A B C D Corporate Admin. Combined Intersegment Eliminations Consolidated Revenues: Sales to unaffiliated customers Intersegment sales Total revenue Operating costs: Traceable costs Allocated Segment profit (loss) Other items: General corporate expenses Income from continuing operations Assets: Segment General corporate Total assets Prepare schedules showing which segments are reportable Segments Revenue Segment Profit Segment Assets A B C D Assume that each division operates in an individual geographic area, Division A is in the domestic area, and each of the other divisions operates in a separate foreign country. Assume that one-half of the assets in each geographic area represents long-lived, productive assets as defined in ASC 280. Prepare schedules showing which geographic areas are reportable using a 10 percent materiality threshold. Country Revenue Long-Lived Assets A Domestic B Foreign C Foreign D Foreign Determine the amount of sales to an outside customer that would cause that customer to be classified as a major customer under the criteria of ASC 280. Amount of sales

Answer 1

Requirement a-1:
	Operating Segments				Corporate	Combined	Intersegment Elimination	Consolidated
	A	B	C	D
Revenues:
Sales to unaffiliated customers	$270,000	$150,000	$330,000	$51,000		$801,000		$801,000
Intersegment sales	$62,000		$16,000	$21,000		$99,000	($99,000)
Total Revenue	$332,000	$150,000	$346,000	$72,000		$900,000	($99,000)	$801,000
Operating Costs:
Traceable costs	($255,000)	($100,000)	($300,000)	($92,000)		($747,000)	$99,000	($648,000)
Allocated cost	($16,600)	($7,500)	($17,300)	($3,600)		($45,000)		($45,000)
Segment profit/(loss)	$60,400	$42,500	$28,700	($23,600)		$108,000		$108,000
Other items:
General Corporate expenses					($30,000)	($30,000)		($30,000)
Income from continuing operations	$60,400	$42,500	$28,700	($23,600)	($30,000)	$78,000		$78,000
Assets:
Segment	$491,000	$115,000	$510,000	$85,000		$1,201,000		$1,201,000
General Corporate					$130,000	$130,000		$130,000
Total Assets	$491,000	$115,000	$510,000	$85,000	$130,000	$1,331,000		$1,331,000
Notes:
Segment revenue	$332,000	$150,000	$346,000	$72,000
Segment revenues as % of total revenue (a)	37%	17%	38%	8%
Joint cost (b)	$45,000	$45,000	$45,000	$45,000
Allocated cost (b) × (a)	$16,600	$7,500	$17,300	$3,600
Requirement a-2:
Particulars	Revenues	Segment Profit	Segment Assets
Segment A	Yes	Yes	Yes
Segment B	Yes	Yes	No
Segment C	Yes	Yes	Yes
Segment D	No	No	No
Note
Reportable when >= 10%	$90,000	$10,800	$120,100
Requirement b:
Particulars	Revenues	Long-lived Assets
Segment A - Domestic	Yes	$245,500	Yes
Segment B - Foreign	Yes	$57,500	No
Segment C - Foreign	Yes	$255,000	Yes
Segment D - Foreign	No	$42,500	No
Note
Reportable when >= 10%	$90,000	$60,050
Requirement c:
Total revenues	$801,000
Reportable percentage	10%
The amount of sales	$80,100