Posted: July 12th, 2016

# Determine which of the segments are reportable?

Problem 1:
Plastics Inc. is a company that operates in four different divisions. The following information relating to each segment is available for 2013.

Sales revenue Cost of goods sold Operating expenses Total expenses Operating profit (loss) Identifiable assets
Bottles \$ 65,000 \$ 26,000 \$8,000 \$ 34,000 \$31,000 \$ 66,000
Containers \$ 95,000 \$ 62,000 \$ 48,000 \$ 110,000 \$ (15,000) \$ 80,000
Dollhouses \$ 620,000 \$ 353,000 \$140,000 \$ 493,000 \$ 127,000 \$ 640,000
Silverware \$18,000 \$ 8,000 \$ 6,500 \$14,500 \$3,500 \$36,000

Sales of segments Containers and Dollhouses included intersegment sales of \$30,000 and \$150,000, respectively.

Required
Determine which of the segments are reportable based on the following:
– Revenue Test
– Operating profit (loss) test
– Identifiable assets test

Problem 2:
The following information pertains to Walrus Inc.
Cash \$60,000
Accounts receivable 170,000
Inventory 100,000
Plant assets (net) 582,000
Total assets \$912,000

Accounts payable \$110,000
Accrued taxes and expenses payable 42,000
Long-term debt 120,000
Common stock (\$10 par) 260,000
Paid-in capital in excess of par 50,000
Retained earnings 330,000
Total equities \$912,000

Net sales (all on credit) \$2,000,000
Cost of goods sold 1,400,000
Net income 120,000

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