CHAPTER 35

OPERATING SEGMENTS
(Part 1)

PROBLEMS

Problem 35-1 (ACP)

Aroma Company and its divisions are engaged solely in manufacturing operations.

The entity reported the following segment profit (Loss) for the current year:

V 3,400,000

W 1,000,000

X (2,000,000)

Y 400,000

Z (200,000)

2,600,000
In the segment information for the current year, what are the reportable

segments?

Problem 35-2 (AICPA Adapted)

Correy Company and its divisions are engaged solely in manufacturing operations.

The following data pertain to the industries in which operations were conducted for the

current year:

Industry Revenue Profit Assets

A 10, 000, 000 1,750,000 20,000,000

B 8,000,000 1,400,000 17,500,000

C 6,000,000 1,200,000 12,5000,000

D 3,000,000 550,000 7,500.000

E 4, 250,000 675,000 7,000,000

F 1,500,000 225,000 3,000,000

32,750,000 5,800,000 67,500,000

How many reportable segments does Correy have?

Problem 35-3 (AICPA Adapted)

Aria Company and its divisions provided the following information for the current year:

Sales to unaffiliated customers 20,000,000

Intersegment sales of products similar to those sold to unaffiliated customers 6,000,000

Interest earned on loans to other operating segments 4,000,000

Aria Company and all of its divisions are engaged solely in manufacturing operations

What is the minimum amount of segment revenue in order that a division

can be considered a reportable segment?

Problem 35-4 (AICPA Adapted)

In the income statement for the current year, Grum Company reported revenue

P50,000,000, excluding intersegment sales P10,000,000, expenses P47,000,000 and net

income P3,000,000.

Expenses included payroll costs of P15,000,000

The combined identifiable assets of all operating segments at year-end totaled

P40,000,000.

1. The entity should disclose major customer data if sales revenue to any

single customer is at least what amount?

2. External revenue of reportable operating segments must be what amount?