Question

1. Each venturer reports the assets contributed to the joint operations on its own books until the final product is sold to the end customer.

True

False

2. If a joint venture sells assets at a profit to a venturer, and the assets have not been resold by the venturer to independent third parties, only the venturer's share of the after-tax profit is eliminated on consolidation.

True

False

3. The definition of "joint control" is when all the equity owners have an equal equity interest and equal voting control in the joint venture.

True

False

4. Joint arrangements are typically classified into two types:

• joint operations and joint assets.

• joint management and joint ventures.

• joint ownership and joint ventures.

• joint operations and joint ventures.

5. Duka Company has assembled the following data regarding its operating segments:

Segment	Revenues		Operating Profit			Assets
A	$	40,500	$	2,400		$	90,000
B		242,500		(17,500	)		117,500
C		82,000		7,200			450,000
D		410,000		19,500			375,000
E		600,000		152,500			175,000
	$	1,375,000	$	164,100		$	1,207,500

Using only the operating profit test, which of the operating segments would be reportable?

• B, E

• D, E

• E

• B, D, E

Answer 1

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