Finney Company\'s condensed income statement is presented below: The following d

Question

Finney Company's condensed income statement is presented below:

The following data is compiled relative to Finney's operating segments:

Included in the amounts allocated to each segment on the above percentages are the following expenses which relate to general corporate activities:

(a)

Prepare a schedule showing the amounts distributed to each segment.

Revenues $940,000 Expenses Cost of goods sold $400,000 Operating and administrative expenses 250,000 Depreciation expense 42,000 692,000 Income before taxes 248,000 Income tax expenses 78,000 Net income $170,000 Earnings per share (100,000 shares) $1.70

Explanation / Answer

Amounts are calculated as = Amount*(Percentage allocated/Total of percentage)

For example, Revenues are calculated as:

Hotels = 940,000*45/(45+48+10) = $410,680
Grains = 940,000*48/(45+48+10) = $438,058
Candy = 940,000*10/(45+48+10) = $91,262

Operating Segment Hotels Grains Candy Totals Revenues $410,680 $438,058 $91,262 $940,000 Expenses: Cost of goods sold $192,157 $200,000 $7,843 $400,000 Operating and administrative expense General $78,303 $115,152 $34,545 $228,000 Specific $11,000 $8,200 $2,800 $22,000 Depreciation General $13,586 $14,233 $3,882 $31,700 Specific $4,500 $2,600 $3,200 $10,300 Total Expense $299,546 $340,184 $52,270 $692,000 Operating Profit $111,134 $97,874 $38,992 $248,000

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