Question

Problem 24-2

Flounder Corporation is a diversified company that operates in five different industries: A, B, C, D, and E. The following information relating to each segment is available for 2018.

A

B

C

D

E

Sales revenue

$40,100

$74,500

$575,600

$34,900

$55,000

Cost of goods sold

19,400

49,200

270,300

19,100

29,900

Operating expenses

10,100

39,700

235,900

12,000

18,300

    Total expenses

29,500

88,900

506,200

31,100

48,200

Operating profit (loss)

$10,600

$(14,400)

$69,400

$3,800

$6,800

Identifiable assets

$35,600

$79,000

$490,300

$65,700

$49,700

Sales of segments B and C included intersegment sales of $20,300 and $101,700, respectively.

(a) Determine which of the segments are reportable based on the:

Reportable Segment

(1)

Revenue test.

A
B
C
D
E
A and B
A and C
A and D
A, B and C
B and C
B and E
B, D and E

(2)

Operating profit (loss) test.

A
B
C
D
E
A and B
A and C
A and D
A, B and C
B and C
B and E
B, D and E

(3)

Identifiable assets test.

A
B
C
D
E
A and B
A and C
A and D
A, B and C
B and C
B and E
B, D and E

(b) Prepare the necessary disclosures required by GAAP. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

A

B

C

Other

Totals

External Revenues

$

$

$

$

$

Intersegment Revenues

Total Revenues

$

Cost of Goods Sold

Operating Expenses

Total Expenses

Operating Profit (Loss)

$

$

$

$

$

Identifiable Assets

$

$

$

$

$

Answer 1

Answer a:

1. Revenue Test:

Correct choice is : C

(2) Operating profit (loss) test:

Correct choice is : A,B and C

(3) Identifiable assets test.

Correct choice is: B and C

Answer b:

Disclosures required by GAAP: