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Exam 8: Segment and Interim Reporting

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Question 51

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Which two items of information must be reported for: (1) the domestic country; (2) all foreign countries in which the enterprise derives revenues or holds assets; and (3) each foreign country in which a material amount of revenues is earned?

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Question 52

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Which of the following statements is true regarding the reporting of revenues in an interim report?

A) Revenues should be recognized on the income tax basis for interim reporting.
B) Revenues should be recognized in interim periods in the same way as they are on an annual basis.
C) Projected losses on long-term contracts should be deferred to the annual report.
D) The percentage-of-completion method of reporting long-term construction projects is not an acceptable method for interim reporting.
E) Revenues should be recognized on the cash basis of accounting for interim reporting.

F) A) and D)
G) C) and D)

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Question 53

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Which of the following would be an acceptable grouping for a U.S. company to provide information by geographic area?

Natarajan, Inc. had the following operating segments, with the indicated amounts of segment revenues and segment expenses: According to the revenue test, which segments would require disaggregation?

If a company does not include a balance sheet and a statement of cash flows in an interim report, then which of the following items must be separately disclosed for that interim period?

The Charlton Co. had three operating segments with the following information: In addition, revenues generated at corporate headquarters are $1,500.What is the minimum amount of revenue that each of these segments must earn to be considered separately reportable?

Which one of the following items must be disclosed for all reportable operating segments in the notes to financial statements?Revenue from external customers.Total Segment AssetsRevenues from foreign customers, identified by country.

According to U.S. GAAP, which of the following would be an acceptable grouping by a U.S. company for presentation of information by geographic area?

Faru Co. identified five industry segments: (1) plastics, (2) metals, (3) lumber, (4) paper, and (5) finance. The company properly consolidated the segments when it prepared its annual financial statements. Information describing each segment is presented below (in thousands). Prepare the asset test and determine which of these segments was separately reportable.

Elektronix, Inc. has three operating segments with the following information: What is the operating profit or loss for the VCRs segment?

A company that generates reports by both geographic region and product line must consider additional criteria in identifying operating segments when there are multiple sets of reports. Which of the following statement(s) is correct?An operating segment has a segment manager who is directly accountable to the chief operating decision maker for its financial performance.If more than one set of organizational units exists, each organizational unit is considered an operating segment even if there is only one set for which segment managers are held responsible.If segment managers exist for two or more overlapping sets of organizational units, the nature of the business activities must be considered.

Elektronix, Inc. has three operating segments with the following information: What is the minimum amount of assets an operating segment must have to be considered a reportable segment?

List the five aggregation criteria that need to be considered by management in determining whether business activities and environments are similar.

Wayne, Inc. has four operating segments with the following information: Which operating segments are separately reportable under the asset test?

Gregor Inc. uses the LIFO cost-flow assumption to value inventory. Inventory for Gregor on January 1, 2021 was 100 units at a LIFO cost of $25 per unit. During the first quarter of 2021, 200 units were purchased costing an average of $40 per unit, and sales of 265 units at a retail price of $50 per unit were made.Assuming Gregor does not expect to replace the units of beginning inventory sold, what is the amount of cost of goods sold for the quarter ended March 31, 2021?

Which of the following statements is true regarding the identifying factors used to determine which components of a business are operating segments?

Provo, Inc. has an estimated annual tax rate of 35% in the first quarter of 2021. Pretax income for the first quarter was $300,000. At the end of the second quarter of 2021, Provo expects the annual tax rate to be 32% because of anticipated tax credits. Pretax income for the second quarter was $350,000. Assume no items in either quarter requiring the net-of-tax presentation.How much income tax expense is recognized in the first quarter of 2021?

What is meant by the term: disaggregated financial information?

Which of the following is not a required disclosure in an interim financial report?

Natarajan, Inc. had the following operating segments, with the indicated amounts of segment revenues and segment expenses: When totaling the revenues to use as the basis for the 75% rule, what is the 75% hurdle that must be exceeded by the revenues of the reportable segments?