Asked by Mckenna Jakunskas on Jul 08, 2024
Verified
Globecorp International has six operating segments, the details of which are shown below. All figures shown are in thousands of dollars.
OperatingSegment Revenues Profits Assets A01$6,000$1,050$12,000B02$4,800$840$10,500 C03 $3,600$720$7,500 D04 $1,800$330$4,500 E05 $2,550$405$4,200 F06 $900$135$1,800 Total $19,650$3,480$40,500\begin{array}{|l|r|r|r|}\hline \text { OperatingSegment } & \text { Revenues } & \text { Profits } & \text { Assets } \\\hline \mathrm{A} 01 & \$ 6,000 & \$ 1,050 & \$ 12,000 \\\hline \mathrm{B} 02 & \$ 4,800 & \$ 840 & \$ 10,500 \\\hline \text { C03 } & \$ 3,600 & \$ 720 & \$ 7,500 \\\hline \text { D04 } & \$ 1,800 & \$ 330 & \$ 4,500 \\\hline \text { E05 } & \$ 2,550 & \$ 405 & \$ 4,200 \\\hline \text { F06 } & \$ 900 & \$ 135 & \$ 1,800 \\\hline \text { Total } & \$ 19,650 & \$ 3,480 & \$ 40,500\\\hline\end{array} OperatingSegment A01B02 C03 D04 E05 F06 Total Revenues $6,000$4,800$3,600$1,800$2,550$900$19,650 Profits $1,050$840$720$330$405$135$3,480 Assets $12,000$10,500$7,500$4,500$4,200$1,800$40,500 Using ONLY the assets test, determine which of the following segments require separate disclosures.
Total assets add up to $40,500. $40,500 10% = $4,050
Assets Test
A measure used to determine a company's financial stability by comparing its liquid assets against its liabilities.
Operating Segment
A part of a company that participates in commercial operations, generating income and bearing costs, which encompasses transactions and financial activities with other sectors of the same company.
Separate Disclosures
Financial reporting that provides detailed information separately for each significant item.
- Highlight which segments need to be disclosed following the evaluations of revenue, profit, and assets, as well as the stipulations for operating segments under GAAP.
Verified Answer
SM
Sireen MusallamJul 09, 2024
Final Answer :
Segments A01, B02, C03, D04 and E05 are reportable as their assets exceed $4,050.
Learning Objectives
- Highlight which segments need to be disclosed following the evaluations of revenue, profit, and assets, as well as the stipulations for operating segments under GAAP.