a 350000 b 345000 c 411000 d 406000 11 Eagle Company operates in several

A 350000 b 345000 c 411000 d 406000 11 eagle company

This preview shows page 94 - 99 out of 276 pages.

a. 350,000 b. 345,000 c. 411,000 d. 406,000 11.) Eagle Company operates in several different industries. Total sales for Eagle Company totaled P14,000,000, and total common costs amounted to P6,500,000 for the current year. For internal reporting purposes, Eagle Company allocated common costs based on the ratio of a segment’s sales to total sales. Additional information regarding the different segments follows: Segment Contribution to total sales Costs specific to the segment 1 25% 1,100,000
Image of page 94
2 12% 1,000,000 3 31% 1,300,000 4 23% 880,000 5 9% 400,000 What is the profit of Segment 1? a. 3,500,000 b. 1,875,000 c. 2,400,000 d. 775,000 12.) Congo Company provided the following data for the current year: Sales 60,000,000 Cost of goods sold 28,000,000 Expenses 14,000,000 Depreciation 4,000,000 Income tax expenses 4,000,000 The entity has two major reportable segments, X and Y. An analysis revealed that P1,000,000 of the total depreciation expense and P2,000,000 of the expenses are related to general corporate activities. The remaining expenses and sales are directly allocable to segment activities according to the following percentages: Segment X Segment Y Others Sales 40% 45% 15% Cost of goods sold 35 50 15 Expenses 40 40 20
Image of page 95
Depreciation 40 45 15 What amount should be reported as profit of Segment X? a. 8,200,000 b. 6,600,000 c. 7,000,000 d. 5,400,000 13.) Revlon Company has expanded rapidly and segment reporting is now required. The following data are for the year ended December 31, 2013: Operating Segment Operating Identifiable Segment revenue profit (loss) assets 1 620,000 200,000 400,000 2 100,000 20,000 80,000 3 340,000 70,000 300,000 4 190,000 ( 30,000) 140,000 5 180,000 ( 25,000) 180,000 6 70,000 10,000 120,000 7 120,000 ( 20,000) 140,000 Others 380,000 ( 25,000) 140,000 The “others” category includes five operating segments, none of which has revenue or assets greater than P80,000 and none with an operating profit. Operating Segments 1 and 2 produce very similar products and use very similar production process, butt serve different customer types and use quite different product distribution system. These differences are due in part to the fact that segment 2 operates in a regulated environment while segment 1 does not.
Image of page 96
Operating segments 6 and 7 have very similar products, production processes, product distribution systems, but are organized as separate divisions since they serve substantially different types of customers. Neither Segments 6 and 7 operate in a regulated environment. What are the reportable segments for the year ended December 31, 2013? a. Segments 1, 3, 4 and 5 b. Segments 1, 3, 4, 5 and 7 c. Segments 1, 2, 3, 4 and 5 d. Segments 1, 3, 4, 5 and Segments 6 and 7 combined as one segment INTERIM REPORTING 1.) Farr Company had the following transactions during the quarter ended March 31, 2013. Loss from typhoon 700,000 Payment of fire insurance premium for calendar year 2013 100,000 What amount should be included in the income statement for the quarter ended March 31, 2013? Casualty loss Insurance expense a. 700,000 100,000 b. 700,000 25,000 c. 175,000 25,000 d. 0 100,000 2.) Harper Company incurred an inventory loss from market decline of P840,000 on June 30, 2013. What amount of the inventory loss should be recognized in the quarterly income statement for the three months ended June 30, 2013?
Image of page 97
a. 210,000 b. 280,000 c. 420,000 d. 840,000 3.) Wilma Company experienced a P500,000 decline in the market value of inventory at the end of the first quarter. The entity had expected this declined to reverse in the second
Image of page 98
Image of page 99

You've reached the end of your free preview.

Want to read all 276 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture