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    FinAcc3 Chap9 PDF

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    Reilpeter
    This chapter discusses interim reporting and operating segments. It provides examples of income statements for three companies - Angel, Galaxy and Oliver - for a quarter or month. It also covers the criteria for identifying reportable operating segments, including revenue, profit, assets and the 75% threshold. Multiple choice questions assess understanding of interim reporting requirements and identifying operating segments.

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    FinAcc3 Chap9 PDF

    Uploaded by

    Reilpeter
    41 views3 pages
    This chapter discusses interim reporting and operating segments. It provides examples of income statements for three companies - Angel, Galaxy and Oliver - for a quarter or month. It also covers the criteria for identifying reportable operating segments, including revenue, profit, assets and the 75% threshold. Multiple choice questions assess understanding of interim reporting requirements and identifying operating segments.

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    FinAcc3-Chap9.pdf

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    This chapter discusses interim reporting and operating segments. It provides examples of income statements for three companies - Angel, Galaxy and Oliver - for a quarter or month. It also covers the criteria for identifying reportable operating segments, including revenue, profit, assets and the 75% threshold. Multiple choice questions assess understanding of interim reporting requirements and identifying operating segments.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    41 views3 pages

    FinAcc3 Chap9 PDF

    Uploaded by

    Reilpeter
    This chapter discusses interim reporting and operating segments. It provides examples of income statements for three companies - Angel, Galaxy and Oliver - for a quarter or month. It also covers the criteria for identifying reportable operating segments, including revenue, profit, assets and the 75% threshold. Multiple choice questions assess understanding of interim reporting requirements and identifying operating segments.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 3

    CHAPTER 9

    INTERIM REPORTING AND OPERATING SEGMENTS

    9-1 Angel Company


    Angel Company
    Statement of Comprehensive Income
    For the Quarter Ended September 30, 2012

    Net sales (30% x 9,000,000) P 2,700,000


    Cost of goods sold 1,674,000
    Gross profit (38% x 2,700,000) P 1,026,000
    Operating expenses * (270,000)
    Gain on sale of equipment 280,000
    Profit from Continuing Operations P 1,036,000
    Income Tax 310,800
    Net profit (loss) P (725,200)

    *Operating Expenses:
    Variable = 30% x 600,000 P180,000
    Fixed = (960,000 – 600,000) /4 90,000
    Total P270,000

    9-2 Galaxy Company


    Galaxy Company
    Statement of Comprehensive Income
    For the Month of October 2012

    Net sales P 239,100


    Cost of goods sold:
    Merchandise Inventory, October 1 P 280,000
    Purchases 215,000
    Total goods available for sale 495,000
    Merchandise inventory, October 31 372,600
    Cost of sales P 122,400
    Gross profit P 116,700
    Selling expenses (54,700)
    General and administrative expenses (19,000)
    Net profit P 43,000

    9-3 Blue Bay

    Minimum required assets P5,000,000


    Minimum required revenue 8,600,000
    Minimum required operating result (profit or loss) 2,000,000

    Reportable segments are A, B, C, D and E. The 75% test has also been met.

    9-4 Minimum operating result (profit or loss) P1,100,000

    Reportable segments based on the above test are B, D and E.

    52
    Chapter 9 – Interim Reporting and Operating Segments

    9-5 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

    9-6 Oliver Company

    Revenue (40% x 7,500,000) P3,000,000


    Traceable costs (1,750,000)
    Allocated common costs (1,250,000/2,500,000) x 1,500,000) ( 750,000)
    Profit – Segment 1 P 500,000

    Multiple Choice

    Interim Reporting
    MC1 A
    MC2 D
    MC3 B
    MC4 B
    MC5 A
    MC6 B
    MC7 B
    MC8 C
    MC9 B
    MC10 A
    MC11 B
    MC12 B
    MC13 C 320,000 X ¼ = 80,000
    MC14 A 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
    MC15 C (600,000 x ½) + (1,200,000 x ½) = 900,000
    MC16 A
    MC17 D
    MC18 A (25,000,000 X 10%) – (10,000,000 X 5%) = 2,000,000
    MC19 D (45,000,000 X 10%) – (20,000,000 X 5%) = 3,500,000
    MC20 A 100,000 x 12 = 1,200,000, which is lower than the cost of P1,400,000

    Operating Segments
    MC21 A
    MC22 C
    MC23 B
    MC24 C
    MC25 B
    MC26 A
    MC27 D
    MC28 C 10% (1,000,000 + 300,000)
    MC29 D 500,000 – 225,000 – (240,000 X 500,000/1,500,000)

    53
    Chapter 9 – Interim Reporting and Operating Segments

    MC30 A 2,000,000 – 900,000 – (3,000,000 X 2M/10M)


    MC31 C 10% (153,000,000 – 140,000,000)
    MC32 B 4,000,000 – 2,200,000 – (1,200,000 X 1,800,000/3,000,000)=1,080,000
    MC 33 B

    54

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