Question

Slatter Corporation operates primarily in the United States. However, a few years ago, it opened a plant in Spain to produce merchandise to sell there. This foreign operation has been so successful that during the past 24 months the company started a manufacturing plant in Italy and another in Greece. Financial information for each of these facilities follows:


The company’s domestic (U.S.) operations reported the following information for the current year:
Sales to unaffiliated customers . . . . . . . . . . . . . . . $4,610,000
Intersegment transfers . . . . . . . . . . . . . . . . . . . . . . . . 427,000
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . 2,410,000
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136,000
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 819,000
Long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . 1,894,000

Slatter has adopted the following criteria for determining the materiality of an individual foreign country: (1) sales to unaffiliated customers within a country are 10 percent or more of consolidated sales or (2) long-lived assets within a country are 10 percent or more of consolidated long-lived assets.
Apply Slatter’s materiality tests to identify the countries to reportseparately.


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  • CreatedOctober 04, 2014
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