CHAPTER 13, 5 PLEASE READ: please answer the FULL question, please TYPE your ans
ID: 2393816 • Letter: C
Question
CHAPTER 13, 5
PLEASE READ: please answer the FULL question, please TYPE your answer, please LABEL your answer.
Multiplex Inc., a public company whose stock is traded on a national stock exchange, reported the following information on its consolidated financial statements for 20X5: From the consolidated income state ment: Sales revenues Rental revenues Income before income taxes Income taxes $591,000,000 49,000,000 34,000,000 22,000,000 From the consolidated balance sheet: Total assets $571,000,000 Multiplex management determined that it had the following operating segments during 20X5: (1) car rental, (2) aerospace, (3) communications, (4) health and fitness products, and (5) heavy equipment manufacturing. The company assembled the following information for these industry segments for 20X5 (dollar amounts stated in millions) Health Car RentalAerospaceCommunications FitnessEquipment Heavy Item Sales Rentals Interseqment sales Cost of goods sold Selling expenses 0ther traceable expenses Allocation of common costs Assets Other information: $226 $ 60 $ 50 $270 34 139 62 10 35 179 57 30 18 25 30 13 40 127 90 100 215 Depreciation expense (included above) 35 50 45 60 Capital expenditures 35Explanation / Answer
Answer a. Multiplex Inc. Schedule for 10% Revenue Test For the Year Ended Dec 31, 20X5 (In Millions) Segment Segment Revenue Percent of Combined Revenue Reportable Segment Car Rental 43 6.29% No Aerospace 226 33.04% Yes Communications 60 8.77% No Health/Fitness 50 7.31% No Heavy Equipment 305 44.59% Yes Total 684 Multiplex Inc. Schedule for 10% Segment Profit or Loss Test For the Year Ended Dec 31, 20X5 (In Millions) Segment Segment Profit (Loss) Percent of Test Amount Reportable Segment Car Rental 15 19.23% Yes Aerospace 6 7.69% No Communications 13 16.67% Yes Health/Fitness 14 17.95% Yes Heavy Equipment 30 38.46% Yes Total 78 Calculation of Operating Profit: Car Rental Aerospace Communications Health/Fitness Heavy Equipment Revenue 43 226 60 50 305 Cost of Goods Sold (139) (179) Selling Expenses (18) (62) (30) (25) (57) Other Traceable Expenses (6) (10) (13) (7) (30) Allocation of Common Costs (4) (9) (4) (4) (9) Operating Profit 15 6 13 14 30 Multiplex Inc. Schedule for Segment Assets Test For the Year Ended Dec 31, 20X5 (In Millions) Segment Segment Assets Percent of Test Amount Reportable Segment Car Rental 40 6.99% No Aerospace 127 22.20% Yes Communications 90 15.73% Yes Health/Fitness 100 17.48% Yes Heavy Equipment 215 37.59% Yes Total 572 Answer b. Yes Answer c. Multiplex Operations Industry Segments (In Millions) Car Rental Aerospace Communications Health/Fitness Heavy Equipment Combined Sales to: Unaffiliated Customers 34 226 60 50 270 640 Intersegment Sales 9 35 44 Total Revenue 43 226 60 50 305 684 Depreciation 6 35 6 7 45 99 Segment Profit 15 6 13 14 30 78 Segment Assets 40 127 90 100 215 572 Expenditure for Segment Assets 5 50 - 35 60 150