Taft Corporation operates primarily in the United States. However, a few years ago, it opened a...
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Taft 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: Sales Intersegment transfers. Operating expenses. Interest expense Income taxes Long-lived assets Spain $ 231,000 Sales to unaffiliated customers Intersegment transfers Operating expenses Interest expense. Income taxes Long-lived assets 0 228,000 38,000 89,000 149,000 Italy $ 656,000 101,400 262,000 51,000 41,000 206,000 The company's domestic (U.S.) operations reported the following information for the current year: Greece $ 506,000 116,000 246,000 41,000 56,000 156,000 $ 4,720,000 537,000 2,520,000 192,000 929,000 2,310,000 Taft 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. a. Calculate sales to unaffiliated customers within a country and as a percent of the consolidated sales. b. Calculate long-lived assets within a country and as a percentage of the long-lived assets. c. Apply Taft's materiality tests to identify the countries which are 10 percent or more of consolidated sales or consolidated long-lived assets to be reported separately. Taft 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: Sales Intersegment transfers. Operating expenses. Interest expense Income taxes Long-lived assets Spain $ 231,000 Sales to unaffiliated customers Intersegment transfers Operating expenses Interest expense. Income taxes Long-lived assets 0 228,000 38,000 89,000 149,000 Italy $ 656,000 101,400 262,000 51,000 41,000 206,000 The company's domestic (U.S.) operations reported the following information for the current year: Greece $ 506,000 116,000 246,000 41,000 56,000 156,000 $ 4,720,000 537,000 2,520,000 192,000 929,000 2,310,000 Taft 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. a. Calculate sales to unaffiliated customers within a country and as a percent of the consolidated sales. b. Calculate long-lived assets within a country and as a percentage of the long-lived assets. c. Apply Taft's materiality tests to identify the countries which are 10 percent or more of consolidated sales or consolidated long-lived assets to be reported separately.
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a Calculate sales to unaffiliated customers within a country and as a percent of consolidated sales Spain Sales to unaffiliated customers in Spain 231... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
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