(Segment Reporting) You are compiling the consolidated financial statements for Vender Corporation International. The corporation’s accountant, Vincent Price, has provided you with the following segment information.

Note 7: Major Segments of Business VCI conducts funeral service and cemetery operations in the United States and Canada. Substantially all revenues of VCI’s major segments of business are from unaffiliated customers. Segment information for fiscal 2004, 2003, and 2002 follows.

Instructions Determine which of the above segments must be reported separately and which can be combined under the category “Other.” Then, write a one-page memo to the company’s accountant, Vincent Price, explaining the following.

(a) What segments must be reported separately and what segments can be combined.

(b) What criteria you used to determine reportable segments.

(c) What major items for each must be disclosed.

Transcribed Image Text:

Funeral Floral Cemetery (thousands) Corporate Dried Whey Limousine Consolidated Revenues 2004 $302,000 $10,000 $ 83,000 $7,000 $14,000 $416,000 2003 245,000 6,000 61,000 4,000 8,000 324,000 2002 208,000 3,000 42,000 1,000 6,000 260,000 Operating Income 2004 79,000 1,500 18,000 (36,000) 500 2003 64,000 200 12,000 (28,000) 200 2002 54,000 150 6,000 (21,000) 100 Capital Expenditures" 2004 26,000 1,000 9,000 400 300 2003 28,000 2,000 60,000 1,500 100 2002 14,000 25 8,000 600 Depreciation and Amortization 2004 13,000 100 2003 10,000 2002 8,000 882 2,400 1,400 100 50 1,400 700 25 1,000 600 888 888 882 2,000 65,000 400 48,800 350 39,600 1,000 37,700 700 92,300 50 22,700 200 17,200 100 12,300 25 50 9,700 Identifiable Assets 2004 334,000 1,500 162,000 114,000 500 8,000 620,000 2003 322,000 1,000 144,000 52,000 1,000 6,000 526,000 2002 223,000 500 78,000 34,000 500 3,500 339,500 "Includes $4,520,000, $111,480,000, and $1,294,000 for the years ended April 30, 2004, 2003, and 2002, respectively, for purchases of businesses.