Select the correct answer for each of the following questions.

1. Barbee Corporation discloses supplementary operating segment information for its two reportable segments. Data for \(20 \mathrm{X} 5\) are available as follows:

Additional \(20 \mathrm{X} 5\) expenses are as follows:

Appropriately selected common operating expenses are allocated to segments based on the ratio of each segment's sales to total sales. The 20X5 operating profit for Segment E was:

a. \(\$ 260,000\).

b. \(\$ 335,000\).

c. \(\$ 395.000\)

d. \(\$ 425,000\).
2. The viewpoint used to determine segmental disclosures in annual reports is called the:

a. Segment approach.

b. Portfolio approach.

c. Economic entity approach.

d. Management approach.
3. Dutko Company has three lines of business, each of which is a significant industry segment. Company sales aggregated \(\$ 1,800,000\) in 20X6, of which Segment 3 contributed 60 percent. Traceable costs were \(\$ 600,000\) for Segment 3 from a total of \(\$ 1,200,000\) for the company as a whole. In addition, \(\$ 350,000\) of common costs are allocated in the ratio of a segment's income before common costs to the total income before common costs. For Segment 3 Dutko should report a \(20 \mathrm{X} 6\) segment profit of:

a. \(\$ 200,000\).

b. \(\$ 270,000\).

c. \(\$ 280.000\).

d. \(\$ 480,000\).

e. None of the above.
4. The Stein Company is a diversified company that discloses supplemental financial information on its industry segments. The following information is available for \(20 \times 2\) :

Allocable costs are assigned based on the ratio of a segment's income before allocable costs to total income before allocable costs. This is an appropriate method of allocation. The segment profit for Segment B for 20X2 is:

a. \(\$ 0\).

b. \(\$ 10,000\).

c. \(\$ 30,000\).

d. \(\$ 50,000\)

e. None of the above.
5. Selected data for a segment of a business enterprise are to be reported separately in accordance with FASB 131 when the revenue of the segment exceeds 10 percent of the:

a. Combined net income of all segments reporting profits.

b. Total revenue obtained in transactions with outsiders.

c. Total revenue of all the enterprise's industry segments.

d. Total combined revenue of all segments reporting profits.
6. Kimber Company operates in four different industries, each of which is appropriately regarded as a reportable segment. Total sales for \(20 \mathrm{X} 2\) for all segments combined were \(\$ 1,000,000\). Sales for Segment 2 were \(\$ 400,000\), and the traceable costs were \(\$ 150,000\). Total common costs for all the segments combined were \(\$ 500,000\). Kimber allocates common costs based on the ratio of a segment's sales to total sales, an appropriate method of allocation. The segment profit to be reported for Segment 2 for \(20 \mathrm{X} 2\) is:

a. \(\$ 50,000\).

b. \(\$ 125,000\).

c. \(\$ 200,000\).

d. \(\$ 250,000\).

e. None of the above.
7. The following information pertains to Reding Corporation for the year ended December 31, \(20 \times 6\).

All of Reding's segments are engaged solely in manufacturing operations. Reding has a reportable segment if that segment's revenue exceeds:

a. \(\$ 264,000\).

b. \(\$ 260,000\).

c. \(\$ 204,000\).

d. \(\$ 200.000\).

8. Snow Corporation's revenue for the year ended December 31, 20X2, was as follows:

Snow has a reportable operating segment if that segment's revenue exceeds:

a. \(\$ 6,000\).

b. \(\$ 24,000\).

c. \(\$ 120,000\).

d. \(\$ 144,000\).
9. Porter Corporation is engaged solely in manufacturing operations. The following data (consistent with prior years' data) pertain to the industries in which operations were conducted for the year ended December 31, 20X5:

In its segment information for \(20 \mathrm{X} 5\), how many reportable segments does Porter have?

a. Three.

b. Four.

c. Five.

d. Six.
10. Boecker is a multidivisional corporation which has both intersegment sales and sales to unaffiliated customers. Boecker should report segment financial information for each segment meeting which of the following criteria?

a. Segment profit or loss is 10 percent or more of consolidated profit or loss.

b. Segment profit or loss is 10 percent or more of combined profit or loss of all company segments.

c. Segment revenue is 10 percent or more of combined revenue of all company segments.

d. Segment revenue is 10 percent or more of consolidated revenue.
Use the following information to answer questions 11 and 12 .
Ward Corporation, a publicly owned corporation, is subject to the requirements for segment reporting. In its income statement for the year ending December 31, 20X5, Ward reported revenues of \(\$ 50,000,000\), operating expenses of \(\$ 47,000,000\), and net income of \(\$ 3,000,000\). Operating expenses included payroll costs of \(\$ 15,000,000\). Ward's combined assets of all industry segments at December \(31,20 X 5\), were \(\$ 40,000,000\).

11. In its 20X5 financial statements, Ward should disclose major customer data if sales to any single customer amount to at least:

a. \(\$ 300,000\).

b. \(\$ 1,500,000\).

c. \(\$ 4,000,000\).

d. \(\$ 5,000,000\).
12. In its 20X5 financial statements, Ward should disclose foreign revenues in a specific country if revenues from foreign operations in that country are at least:

a. \(\$ 5,000,000\).

b. \(\$ 4,700,000\).

c. \(\$ 4,000,000\).

d. \(\$ 1,500,000\).

Transcribed Image Text:

Segment E Segment W Sales $750,000 $250,000 Traceable operating expenses 325,000 130,000