2017-vol-3-ch-9-ans
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CHAPTER 50 9 INTERIM REPORTING AND OPERATING SEGMENTS
9-1.
Angel Company Angel Company Statement of Comprehensive Income For the Quarter Ended September 30, 2017 Net sales (30% x 9,000,000) Cost of goods sold Gross profit (40% x 2,700,000) Operating expenses * Gain on sale of equipment Profit from Continuing Operations Income Tax Net profit (loss)
P P P P
*Operating Expenses: Variable = 30% x 600,000 Fixed = (900,000 – 600,000) /4 Total 9-2.
P180,000 75,000 P255,000
ABC Corporation P30 million x 12% P25 million x 4% Commission expense for the second quarter
9-3.
P3,600,000 1,000,000 P4,600,000
Galaxy Company Galaxy Company Statement of Comprehensive Income For the Month of October 2017
Net sales Cost of goods sold: Merchandise Inventory, October 1 Purchases Total goods available for sale Merchandise inventory, October 31 Cost of sales Gross profit Selling expenses General and administrative expenses Net profit 9-4.
2,700,000 1,620,000 1,080,000 (255,000) 100,000 925,000 (277,500) 647,500
P
239,100
P
280,000 215,000 495,000 372,600 122,400 116,700 (54,700) (19,000) 43,000
P P P
Red Company Minimum required revenues P3,275,000 Minimum required operating profit 580,000 Minimum required identifiable assets 6,800,000 Identified reportable segments, based on any of the above tests: A, B, C, D and E
50
Chapter 9 – Interim Reporting and Operating Segments
9-5.
Blue Bay Minimum required assets (10% x P50M) Minimum required revenue (20% x P86M) Minimum required operating result (10% x P20M)
P5,000,000 8,600,000 2,000,000
Reportable segments are A, B, C, D and E. The 75% test has also been met. 9-6.
Minimum operating result (profit or loss) Reportable segments based on the above test are B, D and E.
9-7.
Oliver Company Revenue (40% x 7,500,000) Traceable costs Allocated common costs (1,250,000/2,500,000) x 1,500,000) Profit – Segment 1
9-8.
P1,100,000
P3,000,000 (1,750,000) ( 750,000) P 500,000
Ebony Company Sales Traceable cost Allocated common costs: 1,800,000 x (1,800/3,000) Operating profit – Segment 1
P4,000,000 P2,200,000 1,080,000
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3,280,000 P 720,000
Chapter 9 – Interim Reporting and Operating Segments
MULTIPLE CHOICE QUESTIONS Interim Reporting MC1 MC2 MC3 MC4 MC5 MC6 MC7 MC8 MC9 MC10 MC11 MC12 MC13 MC14 MC15
A B D B B B B C C A D C C B A
MC16 MC17 MC18 MC19 MC20
C A D A A
300,000 x ¼ = 75,000 240,000/4 = 60,000; 600,000 + 60,000 = 660,000 End of January = 200,000 + 50,000 – 192,000 = 58,000 End of February = 58,000 + 380,000 – 408,000 = 30,000 End of March = 30,000 + 704,000 – 604,000 = 130,000 (600,000 x ½) + (1,500,000 x ½) = 1,050,000 Entire amount of P60,000 loss is recognized in the quarter incurred. P2M advertising and P7M staff bonuses (25,000,000 X 10%) – (10,000,000 X 5%) = 2,000,000 100,000 x 12 = 1,200,000, which is lower than the cost of P1,400,000 Operating Segments
MC21 MC22 MC23 MC24 MC25 MC26 MC27 MC28 MC29 MC30 MC31 MC32 MC33 MC34 MC35 MC36 MC37 MC38
A C C B C C B D A B C D A A C D D C
Should be 75% of total external revenue
10% (1,000,000 + 300,000) = 130,000 500,000 – 225,000 – (240,000 x 500,000/1,500,000) = 195,000 2,000,000 – 900,000 – (3,000,000 x 2M/10M) = 500,000 10% x 25M = 2,500,000; (10M+6M+9M = 25M) Assets A, D, and E
52
9-1.
Angel Company Angel Company Statement of Comprehensive Income For the Quarter Ended September 30, 2017 Net sales (30% x 9,000,000) Cost of goods sold Gross profit (40% x 2,700,000) Operating expenses * Gain on sale of equipment Profit from Continuing Operations Income Tax Net profit (loss)
P P P P
*Operating Expenses: Variable = 30% x 600,000 Fixed = (900,000 – 600,000) /4 Total 9-2.
P180,000 75,000 P255,000
ABC Corporation P30 million x 12% P25 million x 4% Commission expense for the second quarter
9-3.
P3,600,000 1,000,000 P4,600,000
Galaxy Company Galaxy Company Statement of Comprehensive Income For the Month of October 2017
Net sales Cost of goods sold: Merchandise Inventory, October 1 Purchases Total goods available for sale Merchandise inventory, October 31 Cost of sales Gross profit Selling expenses General and administrative expenses Net profit 9-4.
2,700,000 1,620,000 1,080,000 (255,000) 100,000 925,000 (277,500) 647,500
P
239,100
P
280,000 215,000 495,000 372,600 122,400 116,700 (54,700) (19,000) 43,000
P P P
Red Company Minimum required revenues P3,275,000 Minimum required operating profit 580,000 Minimum required identifiable assets 6,800,000 Identified reportable segments, based on any of the above tests: A, B, C, D and E
50
Chapter 9 – Interim Reporting and Operating Segments
9-5.
Blue Bay Minimum required assets (10% x P50M) Minimum required revenue (20% x P86M) Minimum required operating result (10% x P20M)
P5,000,000 8,600,000 2,000,000
Reportable segments are A, B, C, D and E. The 75% test has also been met. 9-6.
Minimum operating result (profit or loss) Reportable segments based on the above test are B, D and E.
9-7.
Oliver Company Revenue (40% x 7,500,000) Traceable costs Allocated common costs (1,250,000/2,500,000) x 1,500,000) Profit – Segment 1
9-8.
P1,100,000
P3,000,000 (1,750,000) ( 750,000) P 500,000
Ebony Company Sales Traceable cost Allocated common costs: 1,800,000 x (1,800/3,000) Operating profit – Segment 1
P4,000,000 P2,200,000 1,080,000
51
3,280,000 P 720,000
Chapter 9 – Interim Reporting and Operating Segments
MULTIPLE CHOICE QUESTIONS Interim Reporting MC1 MC2 MC3 MC4 MC5 MC6 MC7 MC8 MC9 MC10 MC11 MC12 MC13 MC14 MC15
A B D B B B B C C A D C C B A
MC16 MC17 MC18 MC19 MC20
C A D A A
300,000 x ¼ = 75,000 240,000/4 = 60,000; 600,000 + 60,000 = 660,000 End of January = 200,000 + 50,000 – 192,000 = 58,000 End of February = 58,000 + 380,000 – 408,000 = 30,000 End of March = 30,000 + 704,000 – 604,000 = 130,000 (600,000 x ½) + (1,500,000 x ½) = 1,050,000 Entire amount of P60,000 loss is recognized in the quarter incurred. P2M advertising and P7M staff bonuses (25,000,000 X 10%) – (10,000,000 X 5%) = 2,000,000 100,000 x 12 = 1,200,000, which is lower than the cost of P1,400,000 Operating Segments
MC21 MC22 MC23 MC24 MC25 MC26 MC27 MC28 MC29 MC30 MC31 MC32 MC33 MC34 MC35 MC36 MC37 MC38
A C C B C C B D A B C D A A C D D C
Should be 75% of total external revenue
10% (1,000,000 + 300,000) = 130,000 500,000 – 225,000 – (240,000 x 500,000/1,500,000) = 195,000 2,000,000 – 900,000 – (3,000,000 x 2M/10M) = 500,000 10% x 25M = 2,500,000; (10M+6M+9M = 25M) Assets A, D, and E
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