Ch13 - Ch13 Student: _ 1. When applying the operating...

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Ch13 Student: ___________________________________________________________________________ 1. When applying the operating profit and loss test to determine reportable segments, FASB 131 prescribes that costs assigned to an operating segment should: A. reflect the reporting practices of the industry. B. reflect the reporting practices of the company. C. be in harmony with international accounting standards. D. be restricted to direct traceable costs and widely accepted common costs. 2. Five of eight internally reported operating segments of Rollins Company qualify under the standards set by FASB 131 for segment reporting. However, the five identified segments do not meet the 75 percent revenue test. FASB 131 prescribes that management: A. subdivide segments until there are at least 10 reportable segments. B. consolidate the remaining operating segments and include them under an "all other" category. C. select additional operating segments until the 75% threshold is met. D. include the heading "corporate headquarters" as an operating segment. 3. Herndon Corporation reported consolidated revenues of $42 million in 2008. Included in these revenues are $3 million in sales to external customers. These customers are located in France. For 2008, Herndon is required to disclose which of the following in a footnote? A. B. C. D. 4. Hart Corporation (U.S.) reported consolidated revenues of $66 million in 2008. Included in these revenues is $8 million in sales to external customers. These customers are located in Spain. For 2008, Hart is required to disclose in a footnote which of the following? A. B. C. D.
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5. Spade Corporation had net sales of $7,000,000 for the quarter ended March 31, 2008. Spade estimates that 3% of its net sales will not be collected. For the year ended December 31, 2008, Spade estimates net sales will be $35,000,000. For the quarter ended March 31, 2008, what is Spade's bad debts expense? A. $1,050,000 B. $ 262,500 C. $ 210,000 D. $ 0 6. Derby Company pays its executives a bonus of 6 percent of income before deducting the bonus and income taxes. For the quarter ended March 31, 2008, Derby had income before the bonus and income tax of $12,000,000. For the year ended December 31, 2008, Derby estimates that its income before bonus and income taxes will be $70,000,000. For the quarter ended March 31, 2008, what is the amount of the bonus that Derby should deduct on its income statement? A. $4,200,000 B. $1,050,000 C. $ 720,000 D. $ 180,000 7. In 2006 and 2007, each of Putney Company's four operating segments met one of the three quantitative tests for segment reporting. In 2008, Segment B failed to qualify under the prescribed tests because of abnormal financial conditions. The other three segments qualified for reporting. For 2008, Segment B: A. should be excluded from segment disclosure but referred to in the management letter to shareholders. B. should be distinctly separated from the other three segments and listed as a "nonqualifying" segment.
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Ch13 - Ch13 Student: _ 1. When applying the operating...

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