Plastics Inc. is a company that operates in four different divisions. The follow
ID: 2349369 • Letter: P
Question
Plastics Inc. is a company that operates in four different divisions. The following information relating to each segment is available for 2013.Sales revenue Cost of goods sold Operating expenses
Bottles $ 65,000 $ 26,000 $8,000
Containers $ 95,000 $ 62,000 $ 48,000
Dollhouses $ 620,000 $ 353,000 $140,000
Silverware $18,000 $ 8,000 $ 6,500
Sales of segments Containers and Dollhouses included intersegment sales of $30,000 and $150,000, respectively.
Required
Determine which of the segments are reportable based on the following:
Revenue Test
Operating profit (loss) test
Identifiable assets test
Explanation / Answer
Revenue Test:Total Revenues are $798K, 10% is $79.8K Containers and Dollhouses meet the test. Operating profit Test:Total operating profits of profitable segments are $194K, 10% is $19.4K Bottles, Dollhouses, and Silverware Meet this testIdentifiable Assets Test:Total assets are $822K, 10% is $82.2K Dollhouses meets this test