Question

Carlton Company is involved in four separate industries. The following information is available for each of the four industries.

Operating Segment	Total Revenue	Operating Profit (Loss)	Identifiable Assets
W	\( 60,000	15,000	\)167,000
X	10,000	3,000	83,000
Y	23,000	(2,000)	21,000
Z	9,000	1,000	19,000
	\(102,000	\)17,000	$290,000

Instructions

Determine which of the operating segments are reportable based on the:

a) Revenue test.

Short answer

Segment W and segment Y both are reportable.

Step-by-step solution

Meaning of Operating Segments

Operating Segments requires specific classes of entities (basically those with publicly exchanged securities) to disclose data around their working segments, items and administrations, the topographical zones in which they work, and their major customers.

Determining the operating segment that is reportable

Calculation of revenue test

$\begin{array}{rcl}\mathrm{Revenue}\mathrm{test}& =& \mathrm{Total}\mathrm{revenues}\times \mathrm{rate}\mathrm{of}\mathrm{revenues}\\ & =& \$102,000\times 10\%\\ & =& \$10,200\end{array}$

Segment W for $60,000 and segment Y for $23,000, both meet this test.