P 15-5 Apply threshold tests—Disclosure Selected information, which is reported to the chief operating officer, for the five segments of Rad Company for the year ended December 31, 2016, is as follows:

Food Tobacco Lumber Textiles Furniture General Corporate Consolidated Revenue Data Sales to unaffiliated customers

$12,000 $10,000 $7,000 $18,000 $7,000 $ 54,000 Sales to affiliated customers 5,000 7,000 8,000 20,000 Income from equity investees 3,000 $ 6,000 9,000 Total revenue $17,000 $17,000 $7,000 $29,000 $7,000 $6,000 $ 83,000 Expense Data Cost of sales $10,000 $9,000 $4,000 $16,000 $4,000 $ 43,000 Depreciation expense 1,000 2,000 2,500 3,000 500 9,000 Other operating expenses 2,000 2,000 1,000 2,000 1,000 8,000 Interest expense 2,000 2,000 $ 3,000 7,000 Income taxes 1,000 2,000 (250) 3,000 750 1,500 8,000 Net income $ 1,000 $2,000 $(250) $ 3,000 $ 750 $ 1,500 $ 8,000 Asset Data Segment assets $18,000 $19,000 $6,000 $22,000 $7,000 $72,000 Investment in affiliates 20,000 $40,000 60,000 General corporate assets 4,000 4,000 Intersegment advances 1,000 2,000 Total assets $19,000 $21,000 $6,000 $42,000 $7,000 $44,000 $136,000 The lumber segment has not been a reportable segment in prior years and is not expected to be a reportable segment in future years.

REQuIRED 1. Prepare schedules to show which of the segments are reportable segments under:

a. The 10 percent revenue test

b. The 10 percent operating-profit test

c. The 10 percent asset test 2. Which of the segments meet at least one of the tests for reportable segments?

3. Must additional reportable segments be identified?

4. Prepare a schedule for appropriate disclosure of the segmented data in the financial report of Rad Company for the year ended December 31, 2016.

526 CHAPTER 15