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Question 7

In accordance with AASB 8/IFRS 8, Carnarvon Ltd has identified three operating segments: general department stores, liquor stores and specialist toy stores.

All three business units earn most of their revenue from external customers, except for the following:

Of the $220m Liquor stores segment revenue, 20% is sold to General department stores segment.

Of the $500m General department stores segment revenue, 30% is sold to Toy stores segment.

General department stores

$m

Liquor stores

$m

Toy stores

$m

All segments

$m

Revenue

500

220

80

800

Segment result (profit)

28

9

6

43

Assets

800

350

150

1 300

Required

(I) What is the percentage calculated for the 75% test (as required by AASB 8 para 15)?

(II)Identify Carnarvon Ltds reportable segments in accordance with AASB 8/IFRS 8.

A.

(I) 75.75%, (II) All three segments

B.

(I) 75.75%, (II) Only General departmental stores and Liquor stores segments

C.

(I) 75.75%, (II) Only General departmental stores segment

D.

(I) 94.50%, (II) All three segments

E.

(I) 94.50%, (II) Only General departmental stores and Liquor stores segments

F.

(I) 94.50%, (II) Only General departmental stores segment

G.

(I) 81.25%, (II) All three segments

H.

(I) 81.25%, (II) Only General departmental stores and Liquor stores segments