Far Eastern University

Manila City

Intermediate Accounting 2 November , 2020

Activity 03 – Operating Segments Ms. Bernadette L. Baul

1) Dance Company has the following information for its five business segments:

Segment Intersegment revenue Segment assets Revenue to external customers

A 20,000,000 2,000,000 25,000,000
B 5,000,000 500,000 5,000,000
C 2,800,000 1,000,000 3,500,000
D 1,200,000 200,000 1,500,000
E 1,000,000 250,000 1,000,000
How much is the minimum amount that should be reported by the reportable segments?
A. 22,500,000 B. 27,000,000 C. 49,500,000 D. 6,600,000

2) Starboy Corporation and its divisions are engaged solely in manufacturing. The following data pertain to the industries in
which operations were conducted for the current year:
Operating profit (loss) Operating profit (loss)
Segment A 10,000,000 Segment D 3,000,000
Segment B 2,000,000 Segment E (12,000,000)
Segment C (11,000,000)

In its segment information for the current year, which is (are) not a reportable segment(s)?
A. Segment A, B, D B. Segments B, D C. Segment B D. None of them

Use the following information for the next two (2) questions:
Rift Stalk has the following information for its five business segments for the year 2020:
Segment External Revenue Internal Revenue Segment profit (loss) Segment assets
A 15,000,000 4,000,000 6,000,000 10,000,000
B 4,500,000 2,000,000 (3,000,000) 5,000,000
C 2,500,000 1,000,000 (2,500,000) 4,000,000
D 1,500,000 700,000 600,000 2,000,000
E 500,000 300,000 (1,500,000) 1,000,000
3) Based on revenue test, which of the foregoing are reportable segments?
A. A, B, C B. A, B, C, D C. A, B, C, D, E D. A, B
4) Based on profit or loss test, how many reportable segments?
A. 2 B. 3 C. 4 D. 5

5) Mia Company provided the following information related to operating segments:

Segment Sales to customers Intersegment sales Total revenue
One 5,000,000 3,000,000 8,000,000
Two 8,000,000 4,000,000 12,000,000
Three 4,000,000 -- 4,000,000
Four 43,000,000 16,000,000 59,000,000
Combined 60,000,000 23,000,000 83,000,000
Elimination -- (23,000,000) (23,000,000)
Consolidated 60,000,000 -- 60,000,000
What is the total revenue that should be disclosed for the reportable segments?
A. 71,000,000 B. 51,000,000 C. 79,000,000 D. 56,000,000

6) Pan Company and its divisions are engaged solely in manufacturing. The entity reported the operating profit or loss of its
divisions at Segment A P20,000,000 profit, Segment B P10,000,000 loss, Segment C P6,000,000 loss, Segment D
P9,000,0000 loss, and Segment E P2,000,000 profit. What is the minimum operating profit or loss for a segment to be
classified as reportable segment?
A. 4,700,000 B. 2,500,000 C. 2,200,000 D. 2,000,000
7) Master Roshi Company provided the following information pertaining to operating segments for the year ended December
31, 2020:

Total revenue P 80,000,000

Sales to external customers included in total revenue 30,000,000

External revenue reported by reportable operating segments must be at least what amount?
A. 60,000,000 B. 37,500,000 C. 30,000,000 D. 22,500,000

8) The following segments were identified for Noxious Corporation:

Segment Operating Profit or Loss
#1 1,000,000
#2 200,000
#3 (500,000)
#4 (100,000)

Which of the four segments is a reportable segment?

A. 1 and 2 only B. 1 and 3 only C. 1, 2 and 3 only D. All four

9) Essence Company and its divisions are engaged solely in manufacturing. The following data pertain to the industries in
which operations were conducted for the current year:
Segment Intersegment sales External revenue
A 1,000,000 5,000,000
B 1,500,000 3,000,000
C 4,000,000 8,000,000
D 500,000 1,300,000
E 2,000,000 2,800,000
F 200,000 900,000

What is the minimum amount of revenue to be considered a major customer?

A. 3,020,000 B. 2,100,000 C. 1,180,000 D. 920,000

Use the following information for the next two (2) questions:
Illusory Company has the following information for its five business segments for the year 2020:
Segment Segment Revenue Segment profit (loss) Segment Assets
A 20,000,000 2,000,000 15,000,000
B 5,000,000 500,000 5,000,000
C 2,800,000 (1,000,000) 3,000,000
D 1,200,000 200,000 1,000,000
E 1,000,000 (250,000) 1,000,000
10) Based on operating profit test, how many segments are deemed reportable?
A. 2 B. 4 C. 3 D. 4
11) Based on asset taste, which of the foregoing are reportable segment?
A. A, B, C B. A, B, C, D C. A, B, C, D, E D. A, B

12) Kram Company and its divisions are engaged solely in manufacturing operations. The following data pertains to the
industries in which operations were conducted for the year ended December 31, 2020.
Segments Total revenue Operating profit Identifiable assets
A 13,000,000 4,000,000 25,000,000
B 9,000,000 2,000,000 20,000,000
C 7,700,000 1,500,000 15,000,000
D 3,000,000 1,000,000 7,000,000
E 3,800,000 800,000 8,000,000
F 3,500,000 700,000 5,000,000
40,000,000 10,000,000 80,000,000

In its segment information for 2020, how many reportable operating segments does Dart have?
A. Three B. Four C. Five D. Six

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13) Under PFRS 8, the method used to determine what information to report for operating segments is referred to as the
A. Segment approach
B. Friendly approach
C. Dramatic approach
D. Management approach

14) Total external revenue reported by operating segments should

A. At least be 75% of the entity’s revenue
B. Not be more than 75% of the entity’s revenue
C. At least be 90% of the entity’s revenue
D. No limit set by PFRS 8

15) Operating segments that may be aggregated are those which exhibit similar economic characteristics and are similar in
the following, except
A. The nature of the products and services, their production processes and distribution methods
B. The type or class of customer for their products and services
C. Their financial position, financial performance, and cash flows
D. Regulatory environment

16) Disclosures for major customer shall be provided if revenues from transactions with a single customer amount to
A. 10% or more of the entity’s external revenues.
B. 10% or more of the entity’s external and internal revenues.
C. 75% or more of the entity’s external revenues.
D. 75% or more of the entity’s external and external revenues.

17) PFRS 8 aims to help users of financial statements

A. Better understand enterprise performance
B. Better assess its prospects for future net cash flows
C. Make more informed judgements about the entity as a whole
D. All of the choices are correct

18) Non reportable segments should

A. Be aggregated and reported as “all other segments”
B. Be aggregated but neither reported nor disclosed
C. Not reported but may be disclosed if included in the necessary reconciliation of segment assets, liabilities, or profit
or loss
D. Not reported but may be disclosed whether or not included in the necessary reconciliation of segment assets,
liabilities, or profit or loss

19) PFRS 8 Operating segments is applied in

I. Separate or individual financial statements
II. Consolidated financial statements
A. I only B. II only C. I and II D. Neither I nor II

20) According to PFRS 8, there may be a practical limit to the number of reportable segments that an entity separately
discloses beyond which segment information may become too detailed. Although no precise limit has been determined,
if the number of segments reportable according to the quantitative threshold reaches this number, the entity should
consider whether a practical limit has been reached.
A. Above ten (10)
B. Above three (3)
C. Below ten (10)
D. Below three (3)

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