Following is financial information describing the six operating segments that ma

Question

Following is financial information describing the six operating segments that make up Fairfield, Inc. (in thousands):

Consider the following questions independently. None of the six segments has a primarily financial nature.

d. Now assume each of the six segments has a profit or loss (in thousands) as follows. Based on these figures, which warrants separate disclosure? (Select all that apply.)

Segments Red Blue Green Pink Black White Sales to outside parties $ 1,817 $ 818 $ 520 $ 315 $ 127 $ 105 Intersegment revenues 22 97 115 0 22 308 Salary expense 620 385 408 318 323 68 Rent expense 145 172 87 98 48 37 Interest expense 71 65 88 55 20 11 Income tax expense (savings) 147 93 67 (92 ) (70 ) 0

Explanation / Answer

Solution: Red, Blue, Black, White  warrants separate disclosure

Working:

Total profit = 1995

Total loss = 328

Red = (1080/1995) x 100 =54%

Blue = (455/1995) x 100 = 23%

Green = (146/1995) x 100 = 7%

Pink = (100/ 1995) x 100 =5%

Black = (228/1995) x 100 = 11%

white= (314/1995) x 100 = 16%

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