For many years, Clark Company operated exclusively in the United States but recently expanded its operations to the Pacific Rim
For many years, Clark Company operated exclusively in the United States but recently expanded its operations to the Pacific Rim countries of New Zealand, Singapore, and Australia. After a modest beginning in these countries, recent successes have resulted in an increased level of operations in each country. Operating information (in thousands of U.S. dollars) for the company's domestic and foreign operations follows.
In addition, common costs of $120,000 are to be allocated to operations on the basis of the ratio of an area's sales to nonaffiliates to total company sales to nonaffiliates.
Required a. Determine the profit or loss for each geographic segment. b. Discuss the general reporting requirements related to the company's geographic areas. c. Determine which, if any, of the three individual foreign geographic segments is separately reportable using a 10 percent materialitythreshold.
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United States New Zealand Singapore Australia Sales to unaffiliated Interarea sales Operating expenses Long-lived assets $2,500 100 1,820 2,200 S 60 10 70 140 $320 $120 290 280 30 80
a Profit or loss for each geographic area U S New Zealand Singapore Australia Sales to unaffiliated …View the full answer
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