This document provides financial information for several companies, including income statements, revenue figures, and asset amounts. It also includes multiple choice questions related to interim reporting and operating segments. Key details include Angel Company's quarterly income statement, ABC Corporation's commission expenses by interest rate, and Red Company's identified reportable segments. The document tests understanding of interim reporting standards and how companies determine operating segments.
This document provides financial information for several companies, including income statements, revenue figures, and asset amounts. It also includes multiple choice questions related to interim reporting and operating segments. Key details include Angel Company's quarterly income statement, ABC Corporation's commission expenses by interest rate, and Red Company's identified reportable segments. The document tests understanding of interim reporting standards and how companies determine operating segments.
This document provides financial information for several companies, including income statements, revenue figures, and asset amounts. It also includes multiple choice questions related to interim reporting and operating segments. Key details include Angel Company's quarterly income statement, ABC Corporation's commission expenses by interest rate, and Red Company's identified reportable segments. The document tests understanding of interim reporting standards and how companies determine operating segments.
This document provides financial information for several companies, including income statements, revenue figures, and asset amounts. It also includes multiple choice questions related to interim reporting and operating segments. Key details include Angel Company's quarterly income statement, ABC Corporation's commission expenses by interest rate, and Red Company's identified reportable segments. The document tests understanding of interim reporting standards and how companies determine operating segments.
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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) P 2,700,000
Cost of goods sold 1,620,000 Gross profit (40% x 2,700,000) P 1,080,000 Operating expenses * (255,000) Gain on sale of equipment 100,000 Profit from Continuing Operations P 925,000 Income Tax (277,500) Net profit (loss) P 647,500
*Operating Expenses: Variable = 30% x 600,000 P180,000 Fixed = (900,000 – 600,000) /4 75,000 Total P255,000
9-2. ABC Corporation
P30 million x 12% P3,600,000
P25 million x 4% 1,000,000 Commission expense for the second quarter P4,600,000
9-3. Galaxy Company
Galaxy Company Statement of Comprehensive Income For the Month of October 2017 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
9-4. 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) P5,000,000
Minimum required revenue (20% x P86M) 8,600,000 Minimum required operating result (10% x P20M) 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) P1,100,000
Reportable segments based on the above test are B, D and E.
9-7. 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
9-8. Ebony Company
Sales P4,000,000 Traceable cost P2,200,000 Allocated common costs: 1,800,000 x (1,800/3,000) 1,080,000 3,280,000 Operating profit – Segment 1 P 720,000
51 Chapter 9 – Interim Reporting and Operating Segments
MULTIPLE CHOICE QUESTIONS
Interim Reporting
MC1 A MC2 B MC3 D MC4 B MC5 B MC6 B MC7 B MC8 C MC9 C MC10 A MC11 D MC12 C MC13 C 300,000 x ¼ = 75,000 MC14 B 240,000/4 = 60,000; 600,000 + 60,000 = 660,000 MC15 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 MC16 C (600,000 x ½) + (1,500,000 x ½) = 1,050,000 MC17 A Entire amount of P60,000 loss is recognized in the quarter incurred. MC18 D P2M advertising and P7M staff bonuses MC19 A (25,000,000 X 10%) – (10,000,000 X 5%) = 2,000,000 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 C MC24 B MC25 C MC26 C Should be 75% of total external revenue MC27 B MC28 D MC29 A MC30 B MC31 C 10% (1,000,000 + 300,000) = 130,000 MC32 D 500,000 – 225,000 – (240,000 x 500,000/1,500,000) = 195,000 MC33 A 2,000,000 – 900,000 – (3,000,000 x 2M/10M) = 500,000 MC34 A 10% x 25M = 2,500,000; (10M+6M+9M = 25M) MC35 C Assets MC36 D A, D, and E MC37 D MC38 C
