1. Which of the following tests may be used to determine if an industry segment of an enterprise is a reportable segment under FASB Statement No. 131?

a. The absolute value of its operating profit is equal to or greater than 10 percent of the total of the operating profit for all segments that reported profits (or the total of the losses for all segments that reported losses).

b. The segment contains 10 percent or more of the combined assets of all operating segments.

c. Its revenue (both from external customers and internal segments) is equal to or greater than 10 percent of total revenue (external and internal).

d. All of these.

2. Hope, Inc., enters into a call option contract with Baker Investment Co. on January 2, 2012. This contract gives Hope the option to purchase 1,000 shares of XYZ stock at $100 per share. The option expires on April 30, 2012. XYZ shares are trading at $100 per share on January 2, 2012, at which time Hope pays $100 for the call option. Assume that the price of the XYZ shares has risen to $120 per share on March 31, 2012, and the Hope is preparing financial statements for the quarter ending March 31. As regards this option, Hope, Inc., would report which of the following?

a. A $20,000 unrealized gain

b. A deferred gain of $19,900

c. Nothing would be reported in the financial statements or the notes.

d. A $20,000 realized gain