Segment Reporting

14. Refer to Fact Pattern #1: Which statement is correct?

1. Inter-segment sales should be included in the numerator when calculating the 10% significant revenue test

2. Inter-segment sales should be included in the denominator when calculating the 10% significant revenue test

3. Both a and b

4. Neither a nor b

15. Refer to Fact Pattern #1: Which segment(s) should be separately reported because it met the 10% Significant Revenue test?

1. Bicycles

2. Electronics

3. Gas & Oil

4. All of the above

5. None of the above

16. Refer to Fact pattern 1: Which segment meets the 10% Significant Profit test?

1. Bicycles

2. Electronics

3. Sporting Goods

4. All of the above

5. None of the above

17. Refer to Fact Pattern #1: Because the Glassware segment failed to meet all three 10% tests, the Glassware segment would not be separately reported.

1. True (This is a correct statement)

2. False (This is not a correct statement.)

18. Refer to Fact Pattern #2: Calculate Segment As Profit (after taking into account both traceable and allocable costs).

    1. 109,334

    2. 225,000

    3. 312,500

    4. 400,000

    5. None of the above

19. Refer to Fact Pattern #2: Segment A should be a separately reported segment because it meets the 10% Profit Test.

1. Yes

2. No

3. Can not be determined insufficient information to make a determination

20. Refer to Fact Pattern #3: According to the fact pattern, Costa Rica would need to be separately disclosed as a specific country because its Revenues are significant.

1. True

2. False

21. Refer to Fact Pattern #3: Which statement is correct?

1. Inter-area sales should be included in the numerator when calculating the 10% significant revenue test

2. Inter-area sales should be included in the denominator when calculating the 10% significant revenue test

3. Both a and b

4. Neither a nor b

22. Refer to Fact Pattern #3: Which of the following countries would need to be separately disclosed?

1. Belgium

2. Italy

3. Both a and b

4. Neither a nor b

23. According to fact pattern #4, the computer software segment would be separately reported because of the materiality of its customers?

1. True

2. False

FACT PATTERN #1 for the top questions

				Segment		Segment
Segments		Revenues		Profit		Assets
Electronics		49,000		8,600		73,000
Bicycles	*	100,000		(30,400)		207,000
Sporting Goods		52,000		4,900		68,000
Home Appliances		150,000		(23,000)		232,000
Gas & Oil Equipment		54,000		(11,700)		315,000
Glassware		40,000		19,100		96,000
Hardware		200,000		(38,600)		194,000

* Included in the $100,000 revenue of the Bicycles segment are sales of $40,000 made to the Sporting Goods segment.