Watson Inc., a multinational company, has operating divisions in France, Mexico, and Japan as well as in the United States. The company reported the following information on its consolidated financial statements for 20X5:

The following additional information was assembled for Watson's domestic and international operations for 20X5 (dollars stated in millions):

1. The domestic intracompany sales of \(\$ 50,000,000\) were made to Watson's France division. A total gross profit of \(\$ 20,000,000\) was realized by Watson's domestic operations on these sales. At December 31, 20X5, \(\$ 10,000,000\) of the total gross profit was unrealized from a consolidated viewpoint. At December 31, 20X5, Watson's France division owed domestic \(\$ 15,000,000\) related to these sales.
2. The intracompany sales made by Watson's Japan division were made to Watson's Mexico division. The Japan division realized a gross profit of \(\$ 2,000,000\) on the sales. At December 31, 20X5, all of the goods sold to the Mexico division remained in the inventory of the Mexico division. At December 31,20X5, the Japan division has an \(\$ 8,000,000\) receivable related to these sales.
\section*{Required}

a. Determine if Watson Inc. must separately report its foreign operations.

b. Determine which of the three individual foreign geographic segments is separately reportable. using a 10 percent materiality threshold.

c. Prepare the information about the company's domestic and foreign operations as required by \section*{FASB 131 .}

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From the consolidated income statement: Sales revenues $856,000,000 Net income 60,000,000 From the consolidated balance sheet: Total assets $750,000,000