Sanders Corp. and its divisions are engaged solely in manufacturing operations.

Question

Sanders Corp. and its divisions are engaged solely in manufacturing operations. The following data pertain to the segments in which operations were conducted for the year ended December 31, 2018 Assets 12/31/18 $16,000,000 Industry Profit Revenue $ 8,000,000 6,400,000 4,800,000 2,400,000 3,400,000 1200,000 $26.200.000 $1,320,000 14,000,000 10,000,000 5,200,000 5,600,000 2,400,000 $2,640.000 $53,200.000 1,120,000 (960,000) 440,000 540,000 180,000 In its segment information for 2018, which segments will be reported? Set a schedule using percentage of totals. Do they meet the 75% test? If not, what other segments will you use?

Explanation / Answer

Revenue Test Profit Test Asset on 31/12/2018 Industry Revenue % Industry Revenue % Industry Revenue % A 8000000 31% A 1320000 5% A 16000000 61% B 6400000 24% B 1120000 4% B 14000000 53% C 4800000 18% C -960000 -4% C 10000000 38% D 2400000 9% D 440000 2% D 5200000 20% E 3400000 13% E 540000 2% E 5600000 21% F 1200000 5% F 180000 1% F 2400000 9% Total 26200000 Total 2640000 Total 53200000 As Revenue test , 10% of total Revenue critera fufilled by Industry A, Indutry B, Industry E and criteria of total 75% has also complied if total sales of all these 3 segment will be added, it will be more than 75%. Hence A,B, E will be reportable Segemnt

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