I.

Problem

Blake Company and its division are engaged solely in manufacturing operations. The following data
pertain to the industries in which operations were conducted for the year December 31, 2X15.

Segments Total Operating Identifiable

Revenue Profit Assets
A 20,000,000 3,600,000 40,000,000
B 16,000,000 2,800,000 36,000,000
C 12,000,000 2,400,000 28,000,000
D 6,000,000 1,200,000 16,000,000
E 9,000,000 1,400,000 14,000,000
F 3,000,000 600,000 6,000,000
66,000,000 12,000,000 140,000,000

1. In its segment information, how many reportable segments does Blake Company have?
2. What is the operating segment?

II. Solution
1.) Reportable segments are the following:
a.) Revenue: 66,000,000 x 10% = 6,600,000
b.) Operating profit: 12,000,000 x 10% = 1,200,000
c.) Identifiable assets: 140,000,000 x 10% = 14,000,000

Segments Total Operating Identifiable

Revenue Profit Assets
A Passed Passed Passed
B Passed Passed Passed
C Passed Passed Passed
D Failed Passed Passed
E Passed Passed Passed
F Failed Failed Failed
Answer: Five Segments (A,B,C,D,E)

Operating segment:

2.) Total Revenue (External): 20M+16M+12M+9M/66,000,000 = 0.86 or 86%

So, the company's total revenue meets the 75% revenue-coverage

Segments Total
Revenue
A 20,000,000
B 16,000,000
C 12,000,000
D 6,000,000
E 9,000,000
F 3,000,000
66,000,000