Exercise 24-3 Sweet Company is involved in four separate industries. The followi

ID: 2512194 • Letter: E

Question

Exercise 24-3 Sweet 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 $57,014 $15,710 $160,428

X 9,820 2,450 80,214

Y 24,575 (3,090) 19,362

Z 6,891 1,130 16,596

$98,300 $16,200 $276,600

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

Reportable Segments

(a) Revenue test. __________________

(b) Operating profit (loss) test. ________________

Reportable segment based on Revenue Test.

Reportable if revenue is 10% or more of the combined revenue

Hence, Segment W and Z are reportable

Reportable segment based on Operating profit (loss) test.

Greater of Absolute amount of combined profit or loss is $19,290.

Segment is reportable if absolute amount of its reported profit or loss is 10% or more of the above amount i.e. $1,929.

Hence Segment W,X & Y are reportable

Reportable segment based on Identifiable assets Test.

Reportable if revenue is 10% or more of the combined identifiable assets.

Hence, Segment W and X are reportable

Operating Segment Revenue % W $57,014 58.00% X $9,820 9.99% Y $24,575 25.00% Z $6,891 7.01% $98,300 100.00%

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