Answered step by step
Verified Expert Solution
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
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 $ 231,000 Sales to unaffiliated customers Intersegment transfers Operating expenses Interest expense. Income taxes Long-lived assets 0 228,000 38,000 89,000 149,000 Italy $ 656,000 101,400 262,000 51,000 41,000 206,000 The company's domestic (U.S.) operations reported the following information for the current year: Greece $ 506,000 116,000 246,000 41,000 56,000 156,000 $ 4,720,000 537,000 2,520,000 192,000 929,000 2,310,000 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
★★★★★
3.44 Rating (141 Votes )
There are 3 Steps involved in it
Step: 1
a Calculate sales to unaffiliated customers within a country and as a percent of consolidated sales Spain Sales to unaffiliated customers in Spain 231...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