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Operating Segments - Discussion Problems

This document discusses reporting requirements for operating segments as defined by accounting standards. It provides examples of companies (Mia, Starboy, Dart, etc.) and evaluates their reportable operating segments based on financial information provided, such as revenue, operating profit/loss, identifiable assets, and percentage of total revenue. Reportable segments must meet certain quantitative thresholds to be disclosed separately. The document also addresses what constitutes a major customer for segment reporting purposes.

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Haidee Flavier Sabido
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4K views2 pages

Operating Segments - Discussion Problems

This document discusses reporting requirements for operating segments as defined by accounting standards. It provides examples of companies (Mia, Starboy, Dart, etc.) and evaluates their reportable operating segments based on financial information provided, such as revenue, operating profit/loss, identifiable assets, and percentage of total revenue. Reportable segments must meet certain quantitative thresholds to be disclosed separately. The document also addresses what constitutes a major customer for segment reporting purposes.

Uploaded by

Haidee Flavier Sabido
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Operating Segments

Reportable Segment – Revenue Test


1) Mia Company provided the following information related to operating segments:

Segment Sales to customers Intersegment sales Total revenue


One 5,000,000 3,000,000 8,000,000
Two 8,000,000 4,000,000 12,000,000
Three 4,000,000 -- 4,000,000
Four 43,000,000 16,000,000 59,000,000
Combined 60,000,000 23,000,000 83,000,000
Elimination -- (23,000,000) (23,000,000)
Consolidated 60,000,000 -- 60,000,000
What is the total revenue that should be disclosed for the reportable segments?
A.71,000,000
B.51,000,000
C.79,000,000
D.56,000,000

Reportable Segment – Operating Profit or Loss Test


2) Starboy Corporation and its divisions are engaged solely in manufacturing. The following data pertain to the
industries in which operations were conducted for the current year:

Operating profit or loss


Segment A 10,000,000 Profit
Segment B 2,000,000 Profit
Segment C 11,000,000 Loss
Segment D 3,000,000 Profit
Segment E 12,000,000 Loss

In its segment information for the current year, which is (are) not a reportable segment(s)?
A.Segment A, B, D
B.Segments B, D
C.Segment B
D.None of them

Reportable Segment – Asset Test


3) Dart Company and its divisions are engaged solely in manufacturing operations. The following data pertains to
the industries in which operations were conducted for the year ended December 31, 2017.
Segments Total revenue Operating profit Identifiable assets
A 13,000,000 4,000,000 25,000,000
B 9,000,000 2,000,000 20,000,000
C 7,700,000 1,500,000 15,000,000
D 3,000,000 1,000,000 7,000,000
E 3,800,000 800,000 8,000,000
F 3,500,000 700,000 5,000,000
40,000,000 10,000,000 80,000,000
In its segment information for 2017, how many reportable operating segments does Dart have?
A.Three
B.Four
C.Five
D.Six

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Reportable Segment – 75% Threshold of All Reportable Segment
4) Master Roshi Company provided the following information pertaining to operating segments for the year ended
December 31, 2015:
Total revenue P 80,000,000
Sales to external customers included in total revenue 30,000,000
External revenue reported by reportable operating segments must be at least what amount?
A.60,000,000
B.37,500,000
C.30,000,000
D.22,500,000

Reportable Segment – Additional Reportable Segment


5) Warrior Nun has no intersegment sales and has the following operating segments with their corresponding
revenue:

Segment Revenue Percentage


AA 2,400,000 30%
BB 1,600,000 20%
CC 1,200,000 15%
DD 720,000 9%
EE 640,000 8%
FF 560,000 7%
GG 480,000 6%
HH 400,000 5%
8,000,000 100%

Assume that Segments GG and HH have similar products, similar production process, similar marking
methods and are not operating under regulated environment

Which of the above segments are considered reportable segments?


A.Segments AA, BB, CC, DD, EE, FF, GG, HH
B.Segments AA, BB, CC, GG, HH
C.Segments AA, BB, CC
D.Segments DD, EE, FF

Major Customer
6) Essence Company and its divisions are engaged solely in manufacturing. The following data pertain to the
industries in which operations were conducted for the current year:

Segment Intersegment sales External revenue


A 1,000,000 5,000,000
B 1,500,000 3,000,000
C 4,000,000 8,000,000
D 500,000 1,300,000
E 2,000,000 2,800,000
F 200,000 900,000

What is the minimum amount of revenue to be considered a major customer?


A.3,020,000
B.2,100,000
C.1,180,000
D. 920,000

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