Question
Blanton Corporation is comprised of five operating segments. Information about each of these segments is as follows (in thousands): Grocery Furniture Linens Kitchen Stationery Sales
Blanton Corporation is comprised of five operating segments. Information about each of these segments is as follows (in thousands):
| Grocery | Furniture | Linens | Kitchen | Stationery |
Sales to outsiders | $64 | $33 | $43 | $122 | $14 |
Intersegment transfers | 44 | 3 | 14 | 30 | 12 |
Interest revenue - outsiders | 2 | 0 | 4 | 8 | 0 |
Interest revenue - intersegment | 0 | 2 | 0 | 0 | 11 |
Operating expenses - outsiders | 116 | 19 | 40 | 102 | 13 |
Operating expenses - intersegment | 6 | 11 | 6 | 16 | 11 |
Interest expense | 0 | 10 | 0 | 2 | 0 |
Income taxes | 0 | 0 | 4 | 6 | 12 |
Tangible assets | 18 | 10 | 8 | 52 | 4 |
Intangible assets | 0 | 0 | 4 | 8 | 0 |
Intersegment loans (debt) | 8 | 2 | 0 | 10 | 0 |
Required: (1) Which operating segments are reportable under the revenue test? (2) Which operating segments are reportable under the profit or loss test? (3) Which operating segments are reportable under the asset test? (4) Which operating segments are reportable? (5) According to the test results for reportable segments, is there a sufficient number of reported segments or should any additional segments also be disclosed? Explain the reason for your conclusion.
Show your calculations
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started