Chapter 24: 9Q (page 1445)
Identify the segment information that is required to be disclosed by GAAP.
The segment's disclosures are outlined to help financial statement users understand an entity's performance, survey its anticipated future cash flows, and make informed choices about the substance.
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Identifiable assets for the seven industry segments of Foley Corporation are:
Penley $ 500 Cheng 200
Konami 550 Takuhi 150
KSC 250 Molina 475
Red Moon 400
Based only on the identifiable assets test, which industry segments are reportable?
Heartland Company’s budgeted sales and budgeted cost of goods sold for the coming year are \(144,000,000 and \)99,000,000, respectively. Short-term interest rates are expected to average 10%. If Heartland can increase inventory turnover from its present level of 9 times a year to a level of 12 times per year, compute its expected cost savings for the coming year.
What is the relationship of the asset turnover to the return on assets?
The FASB requires a reconciliation between the effective tax rate and the federal government’s statutory rate. Of what benefit is such a disclosure requirement?
Cineplex Corporation is a diversified company that operates in five different industries: A, B, C, D, and E. The following information relating to each segment is available for 2018.
A | B | C | D | E | |
Sales revenue | \(40,000 | \)75,000 | \(580,000 | \)35,000 | \(55,000 |
Cost of goods sold | 19,000 | 50,000 | 270,000 | 19,000 | 30,000 |
Operating expenses | 10,000 | 40,000 | 235,000 | 12,000 | 18,000 |
Total expenses | 29,000 | 90,000 | 505,000 | 31,000 | 48,000 |
Operating profit (loss) | \)11,000 | \((15,000) | \)75,000 | \(4,000 | \)7,000 |
Identifiable assets | \(35,000 | \)80,000 | \(500,000 | \)65,000 | \(50,000 |
Sales of segments B and C included intersegment sales of \)20,000 and $100,000, respectively.
Instructions
(b) Prepare the necessary disclosures required by GAAP.
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