intermediate Financial Reporting II

Q. No. 5 Tangerine Corporation's most recent (condensed) income statement is presented below: Revenues........ $ 2,500,000 Expenses Cost of goods sold ...........". $ 1,000,000 Operating and administrative expenses...... 500,000 Depreciation expense ..... 100,000 1,600,000 Income before taxes...... 900,000 Income tax expense. 270,000 Net income ...... $ 630,000 Earnings per share (100,000 shares).. $ 6.30 The following data relates to Tangerine's operating segments: Percent Identified with Segment Hotels Grains Candy Revenues 42% 50% 8% Cost of goods sold 48 49 3 Operating and administrative expenses 35 50 15 Depreciation expense 46 42 12 Included in the amounts allocated to each segment on the above percentages are the following expenses, which relate to general corporate activities: Operating Segment Hotels Grains Candy Totals Operating and administrative expenses $ 30,000 $ 22,000 $ 8,000 $ 60,000 Depreciation expense 4,000 5,000 3,000 12,000 Instructions (Assume that the corporation adheres to IFRS) a) Prepare a schedule showing the amounts distributed to each segment. b) Based only on the above information, which segments must be reported and why