3E_c Carlton Company is involved in f... [FREE SOLUTION]

Chapter 24: 3E_c (page 1447)

Carlton 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
$ 60,000
15,000
$167,000
X
10,000
3,000
83,000
Y
23,000
(2,000)
21,000
Z
9,000
1,000
19,000

$102,000
$17,000
$290,000
Instructions
Determine which of the operating segments are reportable based on the:
c) Identifiable assets test.

Short Answer

Expert verified

Segment W and X both are reportable.

Step by step solution

Meaning of operating segment

Operating segments require specific groups of enterprises (mostly with publicly traded stocks) to publish information about their work areas, objects, and administrations, the topographical area in which they operate, and their major customers.

Determining the operating segment that is reportable

Calculation of Identifiable assets test

$\begin{array}{rcl} Identifiable assets test & = & Total value of identifiable assets 脳 Identifiable rate \\ = & $ 290, 000 脳 10 % \\ = & $ 29, 000 \end{array}$

Segments W for $167,000 and X for $83,000 both meet the test.

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GILMOUR COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2018 AND 2017
December 31
	2018	2017
Assets
Cash	\( 180,000	\) 275,000
Accounts receivable (net)	220,000	155,000
Short-term investments	270,000	150,000
Inventories	1,060,000	980,000
Prepaid expenses	25,000	25,000
Plant & equipment	2,585,000	1,950,000
Accumulated depreciation	(1,000,000)	(750,000)
	\(3,340,000	(2,785,000)

Liabilities and Stockholders鈥� Equity
Accounts payable	\) 50,000	\( 75,000
Accrued expenses	170,000	200,000
Bonds payable	450,000	190,000
Common stock	2,100,000	1,770,000
Retained earnings	570,000	550,000
	\)3,340,000	(2,785,000)

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Short Answer

Step by step solution

Meaning of operating segment

Determining the operating segment that is reportable

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Operating Segment	Total Revenue	Operating Profit (Loss)	Identifiable Assets
W	\( 60,000	15,000	\)167,000
X	10,000	3,000	83,000
Y	23,000	(2,000)	21,000
Z	9,000	1,000	19,000
	\(102,000	\)17,000	$290,000