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Northern Chemicals, Inc., produces products in five separate lines of buisness: pharmaceuticals, paint and paint products, over-the-counter health products, vitamins, and beauty products. Each segment
| Northern Chemicals, Inc., produces products in five separate lines of buisness: pharmaceuticals, paint and paint products, | |||||||||
| over-the-counter health products, vitamins, and beauty products. Each segment is accounted for separately, with a | |||||||||
| vice president in charge of each line of business. The results reported by each segment for the fiscal year 2021 were as follows: | |||||||||
| Beauty | Paint | Pharmacy | Vitamins | Health | |||||
| Sales revenue | 3,300,000 | 9,000,000 | 11,600,000 | 3,000,000 | 6,600,000 | ||||
| Cost of goods sold | 1,560,000 | 5,900,000 | 5,000,000 | 1,480,000 | 3,600,000 | ||||
| Operating expenses | 1,440,000 | 4,700,000 | 4,700,000 | 1,680,000 | 2,160,000 | ||||
| Total expenses | 3,000,000 | 10,600,000 | 9,700,000 | 3,160,000 | 5,760,000 | ||||
| Operating profit (loss) | 300,000 | (1,600,000) | 1,900,000 | (160,000) | 840,000 | ||||
| Identifiable assets | 3,080,000 | 9,800,000 | 11,400,000 | 3,440,000 | 7,800,000 | ||||
| The sales of Health included intersegment sales of $80,000, and Pharmacy sales included intersegment sales of $400,000. | |||||||||
| Required: | |||||||||
| 1. Determine which of the segments are reportable based on the: | |||||||||
| a. Revenue test. | |||||||||
| b. Operating profit (loss) test. | |||||||||
| c. Identifiable assets test. | |||||||||
| 2. Prepare the necessary disclosures required by GAAP. | |||||||||
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Payroll Accounting
Authors: Bernard J. Bieg, Judith A. Toland
2013 edition
113396253X, 978-1133962533
