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Fireside Corporation is organized into four segments. The internal reporting system generated the following segment information:

Revenues from outsiders Intersegment Transfers Operating Expenses
Cards 1,200,000 100,000 900,000
Calendars 900,000 200,000 1,350,000
Clothing 1,000,000 0 700,000
Books 800,000 50,000 770,000

*see attached*
The company incurred additional operating expenses (of a general nature) of $700,000.
What is the profit or loss of each of these segments? Perform the profit or loss test to determine which of these segments is separately reportable.

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Computation in Excel plus comments about how the tests work are provided.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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