Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Taft Corporation operates primarily in the United States. However, a few years ago, it opened a plant in Spain to produce merchandise to sell

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Taft Corporation operates primarily in the United States. However, a few years ago, it opened a plant in Spain to produce merchandise to sell there. This foreign operation has been so successful that during the past 24 months the company started a manufacturing plant in Italy and another in Greece. Financial information for each of these facilities follows: Sales Intersegment transfers Operating expenses Interest expense Income taxes Long-lived assets Spain $ 206,000 Italy $ 630,000 Greece $ 480,000 0 100,600 202,000 236,000 90,000 220,000 28,000 41,000 31,000 79,000 121,000 31,000 46,000 180,000 130,000 The company's domestic (U.S.) operations reported the following information for the current year: Sales to unaffiliated customers Intersegment transfers. Operating expenses Interest expense Income taxes Long-lived assets $ 4,620,000 487,000 2,470,000 166,000 879,000 2,260,000 Taft has adopted the following criteria for determining the materiality of an individual foreign country: (1) Sales to unaffiliated customers within a country are 10 percent or more of consolidated sales, or (2) long-lived assets within a country are 10 percent or more of consolidated long-lived assets. a. Calculate sales to unaffiliated customers within a country and as a percent of the consolidated sales. b. Calculate long-lived assets within a country and as a percentage of the long-lived assets. c. Apply Taft's materiality tests to identify the countries which are 10 percent or more of consolidated sales or consolidated long-lived assets to be reported separately.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Tools for Business Decision Making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

6th edition

1118096894, 978-1-11921511, 978-1118096895

More Books

Students also viewed these Accounting questions