Which segments are separately reportable?
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Union Products has seven operating segments. Data on the segments are as follows:
Segments Segment
Segments Revenues Profit (Loss) Assets
Electronics $ 42,000 $ (8,600) $ 73,000
Bicycles 105,000 30,400 207,000
Sporting Goods 53,000 (4,900) 68,000
Home Appliances 147,000 23,000 232,000
Gas and Oil Equipment 186,000 11,700 315,000
Glassware 64,000 (19,100) 96,000
Hardware 178,000 38,600 194,000
----------- ------------ --------------
Total 775,000 71,100 1,185,000
======= ======= ===========
Included in the $ 105,000 revenue of the bicycles segment are the sales of $ 25,000 made to the Sporting Goods segment.
Required :
a. Which segments are separately reportable.
b. Do the separately reportable segments include a sufficient portion of total revenue? Explain.
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Solution Summary
These tests are done in excel (attached) for you. Your response gives you the three "tests" to check and see if you have a reportable segment and then puts your data into excel and shows you how to do the computations to check if they are "reportable" segments.
Solution Preview
The rule is that a segment is a "reportable segment" if it satisfied ONE or more of these:
1. Revenue (including sales to other segments) of 10% or more of total revenue
2. Profit or loss is 10% or more ...
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