2P_b Cineplex Corporation is a divers... [FREE SOLUTION]

Chapter 24: 2P_b (page 1450)

Cineplex Corporation is a diversified company that operates in five different industries: A, B, C, D, and E. The following information relating to each segment is available for 2018.
A
B
C
D
E
Sales revenue
$40,000
$75,000
$580,000
$35,000
$55,000
Cost of goods sold
19,000
50,000
270,000
19,000
30,000
Operating expenses
10,000
40,000
235,000
12,000
18,000
Total expenses
29,000
90,000
505,000
31,000
48,000
Operating profit (loss)
$11,000
$(15,000)
$75,000
$4,000
$7,000
Identifiable assets
$35,000
$80,000
$500,000
$65,000
$50,000
Sales of segments B and C included intersegment sales of $20,000 and $100,000, respectively.
Instructions
(b) Prepare the necessary disclosures required by GAAP.

Short Answer

Expert verified

Revenues, assets, and profit from reportable segments are $575,000, $615,000 and $71,000 respectively.

Step by step solution

Meaning of GAAP

GAAP provides a uniform technique for compiling financial statements and executing accounting functions for businesses. Small business owners and accountants can use GAAP to maintain track of a company's finances. GAAP simplifies the presentation of a company's finances to outside parties (such as banks).

Disclosures required by GAAP

	A	B	C	Others	Total
External Revenues	$40,000	$ 55,000	$480,000	$ 90,000	$665,000
Intersegment Revenues		20,000	100,000		120,000
Total Revenues	40,000	75,000	580,000	90,000	$785,000
Cost of Goods Sold	19,000	50,000	270,000	49,000
Operating Expenses	10,000	40,000	235,000	30,000
Total Expenses	29,000	90,000	505,000	79,000
Operating Profit (Loss)	$11,000	$(15,000)	$75,000	$11,000	$82,000
Identifiable Assets	$35,000	$80,000	$500,000	$115,000	$730,000

Working notes:

Reconciliation of revenues

Total segment revenues	$785,000
Revenues of immaterial segments	(90,000)
Elimination of intersegment revenues	(120,000)
Revenues from reportable segments	$575,000

Reconciliation of profit or loss

Total segment operating profit	$ 82,000
Profits of immaterial segments	(11,000)
Profits from reportable segments	$ 71,000

Reconciliation of profit or loss

Total segment assets	$730,000
Assets of immaterial segments	(115,000)
Assets from reportable segments	$615,000

Unlock Step-by-Step Solutions & Ace Your Exams!

Full Textbook Solutions
Get detailed explanations and key concepts
Unlimited Al creation
Al flashcards, explanations, exams and more...
Ads-free access
To over 500 millions flashcards
Money-back guarantee
We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Recommended explanations on Business Studies Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

BRADBURN CORPORATION BALANCE SHEET MARCH 31
Assets	2018	2017
Cash	\) 18,200	\( 12,500
Notes receivable	148,000	132,000
Accounts receivable (net)	131,800	125,500
Inventories (at cost)	105,000	50,000
Plant & Equipment (net of depreciation)	1,449,000	1,420,500
Total assets	\)1,852,000	\(1,740,500

Liabilities and Stockholders鈥� Equity
Accounts payable	\) 79,000	\( 91,000
Notes payable	76,000	61,500
Accrued liabilities	9,000	6,000
Common stock (130,000 shares, \)10 par)	1,300,000	1,300,000
Retained earnings*	388,000	282,000
Total liabilities and stockholders鈥� equity	\(1,852,000	\)1,740,500

91影视

Short Answer

Step by step solution

Meaning of GAAP

Disclosures required by GAAP

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Business Studies Textbooks

Strategic Direction

Strategic Analysis

Financial Performance

Human 91影视

Nature of Business

Public Relations Business Studies

Study anywhere. Anytime. Across all devices.

	A	B	C	D	E
Sales revenue	\(40,000	\)75,000	\(580,000	\)35,000	\(55,000
Cost of goods sold	19,000	50,000	270,000	19,000	30,000
Operating expenses	10,000	40,000	235,000	12,000	18,000
Total expenses	29,000	90,000	505,000	31,000	48,000
Operating profit (loss)	\)11,000	\((15,000)	\)75,000	\(4,000	\)7,000
Identifiable assets	\(35,000	\)80,000	\(500,000	\)65,000	\(50,000