Name : Anggelina Ariresta

ID Number : 008201900008

Class : Accounting Class 1 – Auditing

Subject : Advanced Accounting 2

ASSIGNMENT 2

Requirement :

1. In applying the "operating profit or loss" test to identify reporting segments, what is the
test value for Calam Corporation?

Answer :

If the absolute value of the total segments showing operating losses , $ 95,000 , is more than
the absolute value of the profitable segments , $ 85,000 , then the absolute value of the loss
segments , when multiplied by 10% , would become the test value for each segment . The $
95,000 is multiplied by 10% to get $ 9,500 , which is the test value for both the profitable and
loss segments.

2. Using the "reported profit or loss" test, which of Calam's operating segments will also be
reporting segments?

Answer :

Using the test value of $9,500 for profit and loss of the segments, only the Service Contracts
and Catalog Sales segments would not be considered reportable segments.