FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 15: Segment and Interim Financial Reporting

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Essay

Review LaterAdd Note

Review Later

Krull Corporation is preparing its interim financial statements for the third quarter of calendar 2014. The following trial balance information is available for third quarter: Additional information At the end of the year, Krull distributes annual employee bonuses and charitable donations that are estimated at $40,000, and $12,000, respectively. The cost of goods sold includes the liquidation of a $45,000 base layer in inventory that Krull will restore in the fourth quarter at a cost of $75,000. Effective corporate tax rate for 2014 is 32%. Required: Prepare Krull's interim income statement for the third quarter of calendar 2014.

Correct Answer

verified

Show Answer

Question 22

Essay

Review LaterAdd Note

Review Later

For internal decision-making purposes, Elom Corporation's operating segments have been identified as follows: Corporate assets are typically allocated back evenly to the segments for internal analysis purposes. Required: 1. In applying the "asset" test to identify reporting segments, what is the test value for Elom Corporation? 2. Using the "asset" test, which of Elom's operating segments will also be reporting segments?

Correct Answer

verified

Requirement 1
Total identifiable assets ...

View Answer

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

GAAP requires that segment information be reported

The following data relate to Elle Corporation's industry segments. (Elle HQ represents the corporate headquarters). All other segments are geographical sales segments. Required: 1. Prepare a report which reconciles the reportable segment profits to total consolidated profits assuming that corporate expenses are not allocated to the operating segments. 2. Prepare a report which reconciles the reportable segment profits to total consolidated profits assuming that corporate expenses are allocated evenly among the operating segments.

For internal decision-making purposes, Dashwood Corporation's operating segments have been identified as follows: Revenues of the segments are external, with the exception of tools, which sold $400,000 to other segments, and Appliances, which sold $200,000 to other segments. Required: 1. In applying the "revenue" test to identify reporting segments, what is the test value for Dashwood Corporation? 2. Using the "revenue" test, which of Dashwood's operating segments will also be reportable segments?

What is the purpose of interim reporting?

Nettle Corporation is preparing its first quarterly interim report. It is subject to a corporate income tax rate of 20% on the first $50,000 of taxable income and 35% on taxable income above $50,000. Its estimated pretax accounting income for 2014, by quarter, is: Nettle expects to earn and receive operating income for the year and does not contemplate any changes in accounting procedures or principles that would affect its pretax accounting income. Required: 1. Determine Nettle's estimated effective tax rate for 2014. 2. Prepare a schedule to show Nettle's estimated net income for each quarter of 2014.

Tillman Fabrications has five operating segments, as summarized below: Required: Determine which of the operating segments of Tillman Fabrications are reportable segments for the period shown.

Jacana Company uses the LIFO inventory method. During the second quarter, Jacana experienced a 100-unit liquidation in its LIFO inventory at a LIFO cost of $430 per unit. Jacana considered the liquidation temporary and expects to replace the units in the third quarter at an estimated replacement cost of $460 a unit. The cost of goods sold computation in the interim report for the second quarter will

Quantex Corporation has five operating segments, as summarized below: Required: Determine which of the operating segments of Quantex Corporation are reportable segments for the period shown.

Osprin Corporation has three operating segments, as summarized below: Required: 1. Using the revenue test, what is the minimum amount of revenue of a reportable segment? 2. Using the operating profit or loss test, what is the minimum amount of operating profit or loss of a reportable segment? 3. Using the asset test, what is the minimum amount of assets of a reportable segment? 4. Based on the three tests, which segments will be separately reported?

The accountant for Baxter Corporation has assigned most of the company's assets to its three segments as follows: The unassigned assets consist of $430,000 of unallocated goodwill and $270,000 of assets attached to the corporate headquarters. For internal decision-making purposes, goodwill is not assigned to the segments and the assets assigned to the corporate headquarters are allocated equally to the operating segments. Required: 1. What is the proper threshold value to use in determining which of the operating segments shown above are reporting segments? 2. Which of the operating segments are considered reporting segments?

Similar operating segments may be combined if the segments have similar economic characteristics. Which one of the following is a similar economic characteristic under GAAP?

In general, GAAP encourages the identification of reportable segments based on the following:

Illiana Corporation has several accounting issues with respect to its interim financial statements for the first quarter of calendar 2014. Required: For each of the independent situations given below, state whether or not the method proposed by Illiana is acceptable. Justify each answer with appropriate reasoning. 1. Illiana will not perform a physical inventory at the end of the calendar quarter. It intends to estimate the cost of sales by using the gross profit inventory method. 2. Illiana grants volume discounts to its customers based upon their total annual purchases. The discounts are calculated on a sliding scale ranging from 1% to 8%. The amount of discount applied will progressively increase for a customer as the cumulative purchase total for the customer increases during the year. Illiana will use the average rate of discounts earned for each customer in the prior year as the expected discount rate for the current year. 3. At the beginning of the current quarter, Illiana incurred a large loss on the sale of some of its marketable securities. It intends to distribute the loss evenly to each of the four calendar quarters. 4. Illiana incurs maintenance costs during its year-end holiday shut down, but has minimal maintenance costs during the rest of the year. It intends to deduct one-fourth of the yearly estimated cost on its interim income statement.

An enterprise has eight reporting segments. Five segments show an operating profit and three segments show an operating loss. In determining which segments are classified as reporting segments under the operating profits test, which of the following statements is correct?

The following table is provided in the disclosures for interim reporting by Bigg Company, regarding the location of their assets. Based on the table, which of the following statements is true?

Snodberry Catering has five operating segments, as summarized below: Required: Determine which of the operating segments of Snodberry Catering are reportable segments for the period shown.

Which of the following conditions would not indicate that two business segments should be classified as a single operating segment?

Leotronix Corporation estimates its income by calendar quarter as follows for 2014: Required: Determine Leotronix's estimated effective tax rate.