CHAPTER 44_OPERATING SEGMENTS.pdf - Chapter 44 –...

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74 Chapter 44 – Operating Segments Multiple Choice - Theory 1. D 2. C 3. D 4. C 5. C Multiple choice – Computational (SET A) 1. C Solution: Revenue Profit Assets Totals 32,750,000 5,800,000 67,500,000 10% Thresholds 3,275,000 580,000 6,750,000 Operating segments Revenue test qualifiers Profit test qualifiers Assets test qualifiers A 9 9 9 B 9 9 9 C 9 9 9 D x x 9 E 9 9 9 F x x x 2. B Solution: Sales to unaffiliated customers 2,000,000 Intersegment sales of products similar to those sold to unaffiliated customers 600,000 Total external and internal revenues excluding interest 2,600,000 Multiply by: 10% Revenue threshold 260,000 Interest revenue and interest expense are reported separately for each reportable segment unless a majority of the segment’s revenues are from interest (e.g., financial institution) 3. A (30,000,000 x 10%) = 3,000,000 4. A (30,000,000 x 75%) = 22,500,000
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