Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 SEGMENT AND INTERIM FINANCIAL REPORTING Answers to Questions An operating segment is a component of an enterprise: (1) that engages in business activities from which it may earn revenues and incur expenses, either internal or external; (2) whose operating results are regularly reviewed by the enterprise’s chief operating decision maker and (3) for which discrete financial information is available A reportable segment is an operating segment, either single or aggregated, for which information has to be reported under FASB ASC Topic 280 An operating segment is a reportable segment if (a) its revenue is 10 percent or more of the combined revenue of all operating segments, (b) its absolute operating profit or loss is 10 percent or more of the greater of combined operating profit of all segments that have operating profit or combined operating losses of all segments that have losses, or (c) its identifiable assets are 10 percent or more of the combined identifiable assets of all operating segments Segments not meeting one of these tests are subject to a reevaluation, and possible aggregation, if the combined revenue from sales to external customers of all reportable segments is less than 75 percent of consolidated revenue Segments that are not reportable segments are combined with other business activities and reported under an “all other” category The 10 percent revenue test applies to the $480,000 Revenue for purposes of FASB ASC Topic 280 includes revenue from both external and intersegment customers An industry segment is a reportable segment under the 10 percent operating profit test if its operating profit or loss, in absolute amount, equals or is greater than the greater of combined operating profits for all operating segments having operating profits or the absolute value of the combined operating losses for all operating segments having operating losses A segment is a reportable segment under the 10 percent asset test if its assets are 10 percent or more of the combined assets of all operating segments The allocation of general corporate assets depends on the internal operations of the enterprise The key is the asset figure given to the chief operating decision maker on which he or she evaluates performance If corporate assets are not allocated, they become part of the reconciliation between the reportable segments’ assets and consolidated assets A segment is a reportable segment under the 10 percent revenue test if its intersegment and external sales is 10 percent or more of the combined intersegment and external sales of all the operating segments No If the combined revenue from sales to external customers is less than 75 percent of total consolidated revenues, additional operating segments must be identified as reportable segments until the 75 percent test is met Either some of the remaining segments must be aggregated, if they meet the aggregation criteria, so that the combined segment meets the materiality criteria of 10%, or one or more of the five operating segments that were not reportable segments under the 10 percent tests must be identified as reportable segments Find more slides, ebooks, solution manual and testbank on www.downloadslide.com 15-2 Segment and Interim Financial Reporting The following information must be disclosed for reportable segments and for the remainder of the enterprise’s operating segments and other business activities in the aggregate: a Revenue, with separate amounts to unaffiliated and affiliated customers, and disclosure of the basis of accounting for intersegment sales b Operating profit or loss, based on the information reviewed by the chief operating officer c Identifiable assets for each reportable segment d Interest revenue e Interest expense f Aggregate amount of depreciation, depletion, and amortization expense g Unusual items as described in paragraph 26 of APB Opinion No 30 h Equity in the net income of investees accounted for by the equity method i Income tax expense or benefit j Extraordinary items k Significant noncash items other than depreciation, depletion, and amortization 10 If the enterprise is segmented on a geographic basis, complete segment information would be supplied by country of operation If a different criteria is used for segmentation, more limited geographic information is supplied Revenues and long lived assets attributed to the country of domicile and all foreign operations are disclosed Any single country with material operations must also be disclosed separately 11 The fact of and the amount of revenue from each customer must be disclosed if 10 percent or more of an enterprise’s revenue is derived from that customer If 10 percent or more of an enterprise’s revenue is derived from sales to the federal government, or to a state, local, or foreign governmental unit, that fact and the amount of revenue must be disclosed The identity of the segment making such sales must be disclosed, but the customer need not be identified by name 12 The requirements of FASB ASC Topic 280 apply to interim financial statements Like other aspects of interim reporting, segment disclosure is more limited in the interim reports than in the annual reports Required disclosure for each reportable segment in the interim reports include: (1) revenues from external customers, (2) intersegment revenues, (3) a measure of segment profit or loss, (4) total assets for which there has been a material change since the amount disclosed in the annual report, (5) a description of any changes in the basis for segmentation or the basis of measurement of segment profit or loss, (6) a reconciliation of total reportable segment profit or loss and consolidated income before income taxes 13 An annual effective tax rate is computed as the sum of estimated income taxes for each quarter of the year, divided by the estimated income for the year This approach spreads any progression in tax rates over the entire year in accordance with the integral theory of interim reporting 14 The discrete theory assumes that each quarter is a separate and independent accounting period that stands alone By contrast, the integral theory treats each interim period as an essential part of each annual period The integral theory is required under GAAP reporting for interim reports 15 FASB ASC Topic 270 specifies that minimum disclosures for interim reports should include gross revenues, provision for income taxes, extraordinary items and cumulative-effect-type changes on a net-of-tax basis, and net income and related EPS amounts as basic reporting items In addition, disclosures are required of seasonal cost and revenue, significant changes in income tax estimates, or changes in financial position, and material contingencies, extraordinary and unusual or infrequently occurring items Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 15-3 SOLUTIONS TO EXERCISES Solution E15-1 d a d b d b Solution E15-2 Revenue tests 10% revenue test: Concrete and stone products Construction Lumber and wood products Building materials Other Revenue from Affiliated and Unaffiliated Customers $ 400,000 1,000,000 1,800,000 1,000,000 100,000 $4,300,000 Reportable Segment Test Value $430,000 No Yes Yes Yes No Combined Revenue from Reportable Segments to Unaffiliated Customers Combined Revenue from All Segments to Unaffiliated Customers $ 400,000 1,000,000 1,000,000 600,000 100,000 $ 3,100,000 75% revenue test: Concrete and stone products Construction Lumber and wood products Building materials Other $ 1,000,000 1,000,000 600,000 $ 2,600,000 Since the $2,600,000 combined revenue from reportable segments to unaffiliated customers is greater than 75% of $3,100,000 revenue for all unaffiliated customers, no additional segments have to be reported Schedule for disclosing revenue by segment: Lumber Construction and Wood Unaffiliated sales Affiliated sales Total Sales Building Other Totals $1,000,000 $1,000,000 $600,000 $100,000 $2,700,000 1,200,000 $800,000 $400,000 $1,000,000 $1,800,000 $1,000,000 $100,000 $3,900,000 Reconciliation of segment revenue to corporate revenue Total revenue of reportable segments Other revenue Eliminations of intersegment revenue Total consolidated revenue $3,900,000 400,000 (1,200,000) $3,100,000 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Segment and Interim Financial Reporting 15-4 Solution E15-3 Revenue test: 10% of combined revenues (total sales) = $34,400 The food service industry, copper mine, and chemical industry are reportable segments under the revenue test because they each have revenue in excess of $34,400 Operating profit test: 10% of the greater of the combined operating profit of all industries having operating profit ($44,250) or the combined operating loss of all industries having operating losses ($12,750) The food service industry, copper mine, chemical industry, and agricultural products industry are reportable segments because they each have operating profit or loss in excess of $4,425 Asset test: 10% of combined assets ($319,000 total assets less $16,500 corporate assets) = $30,250 The food service industry and chemical industry are reportable segments because they have assets in excess of $30,250 Reportable segments (those that meet at least one of the tests): food service industry, copper mine, chemical industry, and agricultural products industry Solution E15-4 Wow Corporation Segment Revenue for 2011 (in thousands) Sales to unaffiliated customers Intersegment sales Total United States $100,000 30,000 $130,000 Canada $36,000 16,000 $52,000 Other Foreign $42,000 8,000 $50,000 Since revenue from reportable operating segments of $136,000 is greater than 75% of consolidated revenue ($178,000), no additional segments need be reported Revenue Reconciliation: Reportable Segments Other segments Intersegment revenue Consolidated revenue $182,000 50,000 (54,000) $178,000 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 15-5 Solution E15-5 [AICPA adapted] c Revenue test value = $3,275 Industries A, B, C, and E Operating profit test value = $580 Industries A, B, C, and E Identifiable assets test value = $6,750 and E Industries A, B, C, D, d Ten percent of combined revenues of all industry segments b Revenue test value: 10% of sales to unaffiliated ($4,000) and affiliated ($1,200) customers = $520 b Only Beck and DG have total revenues  10% of $166,000 combined revenues: Beck $24,000 total revenue > $16,600 DG $118,000 total revenue > $16,600 d If sales to a single customer total 10% or more of Gum’s reported revenues ($50,000,000  10%), major customer data should be disclosed a If revenues generated by foreign operations in one country are material (10% or more) of consolidated revenue, Gum should report information about that country’s foreign operations c The materiality criteria for reporting a segment based on revenue is 10 percent of total (both external and intersegment, eliminating answer b) revenue (not income, eliminating answer a) of all operating segments (not just those reporting a profit, eliminating answer d) b Sales to other segments are always included in segment income The other three options generally would not be included but any of them could be included Inclusion would depend on whether it was included in the performance report evaluated by the chief operating decision maker Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Segment and Interim Financial Reporting 15-6 Solution E15-6 c Japan is the only foreign segment that has segmental revenues (including intersegment revenues) of over 10% of total segment revenues of $63,000 c United States Canada Germany Japan Mexico Other foreign Total foreign Assets $50,000 7,500 8,500 9,000 2,000 1,500 $78,500 > < > > < Test Value $7,850 $7,850 7,850 7,850 7,850 Reportable Geographic Area yes no yes yes no The test value to determine reportability is 10 percent of consolidated segment assets of $78,500 b United States on all three tests, Japan on the revenue and asset tests, and Germany on the operating profit and asset tests Solution E15-7 d c d Income year to date Tax rate Less: Tax in prior return periods Quarterly period tax expense 1st Quarter $240,000 34% 81,600 $ 81,600 2nd Quarter $420,000 30% 126,000 81,600 $ 44,400 a Estimated total taxes of $26,150  $110,000 estimated pretax income = 23.77% Solution E15-8 Ent Corporation Schedule of Income by Quarter for 2011 Income year-to-date Quarterly period income Income tax expense* Net income * 1st Quarter $30,000 2nd Quarter $70,000 3rd Quarter $110,000 4th Quarter $150,000 Year 2011 $150,000 $30,000 (8,350) $21,650 $40,000 (11,133) $28,867 $ 40,000 (11,133) $ 28,867 $ 40,000 (11,134) $ 28,866 $150,000 (41,750) $108,250 Income tax expense computations: 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter $30,000  278333 = $8,350 $70,000  278333 = $19,483 - $8,350 = $11,133 $110,000  278333 = $30,616 - $19,483 = $11,133 $150,000  278333 = $41,750 - $30,616 = $11,134 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 15-7 Solution E15-9 [Based on AICPA] b The inventory loss was not expected to be temporary, and therefore, the decline was recognized in the first period The subsequent recovery to the original cost is recognized in the third period b The extraordinary loss of $70,000 has to be disclosed, and the annual insurance premium has to be allocated $25,000 per quarter d The full $360,000 loss is included in the second quarter interim report because the loss is permanent a An extraordinary loss is allocated to the quarter to which it relates In this case the $300,000 extraordinary loss is assigned to the third quarter a Under the integral theory each quarterly period is an integral part of each annual period Thus, property taxes of $20,000 ($80,000  25%) and executive bonuses of $80,000 ($320,000  25%) should be allocated to each of the four quarters Solution E15-10 Current cost to replace 4,000 units at $7 Historical cost of inventory liquidated 4,000 units at $5 Adjustment to cost of sales [4,000 units  ($7 - $5)] Cost of sales Adjusted cost of sales for the first quarter $ 28,000 20,000 8,000 550,000 $558,000 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Segment and Interim Financial Reporting 15-8 SOLUTIONS TO PROBLEMS Solution P15-1 Reportable segments under the 10% revenue test: Test value is 10% of $1,158,000 total sales, or $115,800 Reportable industry segments include the apparel, furniture, lumber and wood products, and textiles segments Test value for 75% revenue test is the combined revenue from sales to unaffiliated customers by all industry segments of $892,000  75% = $669,000 Reportable segments: Apparel Furniture Lumber and wood products Textiles Total $164,000 208,000 175,000 50,000 $597,000 Sales to unaffiliated customers by the reportable industry segments of $597,000 is less than the $669,000 test value Therefore, additional segments must be identified as reportable segments The construction industry, as closest to the 10% criteria, should be included as a reportable segment Under the assumption that tobacco and paper share the majority of their operating characteristics they would be combined into one segment that now meets the 10% test and complies with the 75% criteria Construction would no longer need to be reported Note to disclose information about segment data: Apparel Tobacco and paper Furniture Lumber and wood products Textiles Other segments Total revenue Sales to Unaffiliated Customers $ 164,000 183,000 208,000 175,000 50,000 112,000 $ 892,000 Sales to Affiliated Customers $ 6,000 90,000 170,000 $266,000 Total Sales $ 164,000 183,000 214,000 265,000 220,000 112,000 $1,158,000 Reconciliation of Segment Revenue to Consolidated Revenue: Reportable segment revenue Other revenue Intersegment revenue Consolidated revenue $1,046,000 112,000 (266,000) $ 892,000 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 15-9 Solution P15-2 Reportable segments Revenue test ($600,000 + $105,000)  10% = $70,500 Reportable segments: Food Chemical Beverages $350,000 $150,000 $ 72,000 Operating profit test ($85,000 + $10,000)  10% = $9,500 Reportable segments: Food Chemical Beverages $ 45,000 $ 23,000 $ 18,000 Asset test $645,000  10% = $64,500 Reportable segments: Food Chemical $310,000 $150,000 Reportable segments test Test value $600,000 consolidated sales  75% = $450,000 Unaffiliated sales: Food Chemical Beverages Total Sales by reportable segments ($472,000) are greater than the $450,000 test value and no additional reportable segments are required $300,000 110,000 62,000 $472,000 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Segment and Interim Financial Reporting 15-10 Solution P15-3 Operating segments (foreign geographic areas): Revenue test Canada Mexico Brazil South Africa United States Revenue $ 24,000 20,000 22,000 25,000 149,000 $240,000  < <   Test Value ($240,000  10%) $24,000 24,000 24,000 24,000 24,000 Reportable Geographic Area yes no no yes yes  < <   Test Valuea ($250,000  10%) $25,000 25,000 25,000 25,000 25,000 Reportable yes no no yes yes      Test Valuea ($50,000  10%) $5,000 5,000 5,000 5,000 5,000 Reportable yes yes yes yes yes Asset test Canada Mexico Brazil South Africa United States a Assets $ 30,000 19,000 20,000 31,000 150,000 Total segment assets = $250,000 Profit test Canada Mexico Brazil South Africa United States a Profit $ 6,000 8,000 5,000 7,000 24,000 Total segment profits = $50,000 All five geographic segments (Canada, Mexico, Brazil, South Africa, and the United States) are reportable segments Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 15-11 Solution P15-3 (continued) DaP Corporation Schedule of Operations in Different Geographic Segments for the year ended December 31, 2011 United States Mexico Brazil South Africa Canada Total $120,000 $20,000 $22,000 $15,000 $13,000 $190,000 29,000 $149,000 $20,000 $22,000 10,000 $25,000 11,000 $24,000 50,000 $240,000 Operating profit $ 24,000 $ 8,000 $ 5,000 $ 7,000 $ 6,000 $ 50,000 Identifiable assets $150,000 $19,000 $20,000 $31,000 $30,000 $250,000 Sales to unaffiliated customers Intersegment transfers Total revenue Reconciliations: Revenue: Total revenue of reportable segments Other revenues Elimination of intersegment revenues Total consolidated revenues $240,000 (50,000) $190,000 Profit or Loss: Total profit or loss for reportable segments Other profit or loss Elimination of intersegment profit and loss Unallocated amounts Consolidated income before taxes $ 50,000 0 $ 50,000 Assets: Total assets for reportable segments Other assets Consolidated total $250,000 $250,000 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Segment and Interim Financial Reporting 15-12 Solution P15-4 Reportable segments: Revenue test Sales to Affiliated and Unaffiliated Test Value Customers Foods $ 210 < $240 Soft drinks 1,060 240  Distilled spirits 570 240  Cosmetics 200 < 240 Packaging 120 < 240 Other (4 minor segments) 240 Total revenue $2,400 Reportable Segment no yes yes no no 75% revenue test Foods Soft drinks Distilled spirits Cosmetics Packaging Other (4 minor segments) Sales to Unaffiliated Customers Reportable All Segments Segments $ 180 $ 900 900 550 550 200 110 240 $1,450 $2,180 Since $1,450 < (75%  $2,180), other reportable segments must be identified to bring the total revenue from unaffiliated customers for reportable segments up to $1,635 If no further aggregation is possible, a logical approach is to include cosmetics, the next largest segment in terms of sales to unaffiliated customers If further aggregation of some of the otherwise nonreportable segments were possible (they met the majority of the aggregation criteria), a combined segment may then meet the reportability criteria and would be reported instead of cosmetics The test: $900 + $550 + $200 = $1,650 Since $1,650 > $1,635, the reportable segments are soft drinks, distilled spirits, and cosmetics Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 15-13 Solution P15-4 (continued) Mer Corporation Schedule of Sales to Affiliated and Unaffiliated Customers by Segments for the year ended December 31, 2011 Distilled Spirits Cosmetics Other Segments Totals 900 $550 $200 $530 $2,180 160 20 40 220 $1,060 $570 $570 $2,400 Soft Drinks Sales to unaffiliated customers Sales to affiliated customers Total revenue $ $200 Reconciliation: Revenue from reportable segments Other revenue Elimination of intercompany revenue Consolidated revenue $1,830 570 (220) $2,180 Mer Corporation Disclosure of Revenue from Domestic and Foreign Operations for the year ended December 31, 2011 Sales to unaffiliated customers Interarea sales Total revenue United States $1,850 200 $2,050 Total Foreign $330 20 $350 Japan $250 $250 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Segment and Interim Financial Reporting 15-14 Solution P15-5 Reportable segments: Revenue test Food Tobacco Lumber Textiles Furniture Identified Segment Revenues $17,000 17,000 7,000 26,000 7,000 $74,000   <  < Test Value $7,400 7,400 7,400 7,400 7,400 Reportable Segment yes yes no yes no   <   Test Value $1,050 1,050 1,050 1,050 1,050 Reportable Segment yes yes no yes yes   <  < Test Value $7,500 7,500 7,500 7,500 7,500 Reportable Segment yes yes no yes no Operating profit test Food Tobacco Lumber Textiles Furniture Before Tax Profit $ 2,000 4,000 Operating Loss $(500) 3,000 1,500 $10,500 $(500) Asset test Food Tobacco Lumber Textiles Furniture Identifiable Assets $19,000 21,000 6,000 22,000 7,000 $75,000 Food, tobacco, textile, and furniture segments are reportable segments Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 15-15 Solution P15-5 (continued) Sales to Unaffiliated Customers Reportable All Segments Segments $12,000 $12,000 10,000 10,000 7,000 18,000 18,000 7,000 7,000 $47,000 $54,000 Food Tobacco Lumber Textiles Furniture Since the $47,000 revenue from unaffiliated customers of previously identified reportable operating segments is greater than 75% consolidated revenue (75%  $54,000 = $40,500), no additional reportable segments have to be identified Rad Company Schedule of Operations in Different Segments for the year ended December 31, 2011 Revenues Sales to unaffiliated customers Sales to affiliated Customers Segment revenue Operating profit Segment operating Profit Assets Identifiable assets Depreciation Food Tobacco Textiles Furniture Other Total $12,000 $10,000 $18,000 $7,000 $7,000 $54,000 5,000 $17,000 7,000 $17,000 8,000 $26,000 $7,000 $7,000 20,000 $74,000 $ 4,000 $ 4,000 $ 5,000 $1,500 $ (500) $14,000 $18,000 $ 1,000 $19,000 $ 2,000 $22,000 $ 3,000 $7,000 $ 500 $6,000 $2,500 $72,000 $ 9,000 Reconciliation of revenue: Revenue from reportable segments Revenue from equity investees Other revenue Intersegment eliminations Consolidated revenue $ 67,000 9,000 7,000 (20,000) $ 63,000 Reconciliation of income: Reportable segment income Income from equity investees Other income Interest expense Consolidated income before taxes $ 14,500 9,000 (500) (7,000) $ 16,000 Reconciliation of assets: Reportable segment assets Other segment assets Investment in equity affiliates Corporate assets Consolidated assets $ 66,000 6,000 60,000 4,000 $136,000 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Segment and Interim Financial Reporting 15-16 Solution P15-6 Tut Corporation Schedule of Disclosures for Industry Segments for the year ended December 31, 2011 Chemical Segment Food Segment Drug Segment Totals Revenue Sales to unaffiliated customers Intersegment sales Total sales Expenses Cost of sales General expenses Selling expenses Interest expense Total expenses Segment operating profit $125,000 35,000 160,000 $115,000 25,000 140,000 $120,000 120,000 $360,000 60,000 420,000 $ 80,000 15,000 20,000 5,000 120,000 $ 40,000 $ 70,000 10,000 15,000 95,000 $ 45,000 $ 60,000 10,000 15,000 5,000 90,000 $ 30,000 125,000 Assets $200,000 $180,000 $150,000 $530,000 Reconciliation of revenue: Revenue from reportable segments Revenue from equity investees Interest revenue Intersegment eliminations Consolidated revenue Reconciliation of income: Reportable segment income Income from equity investees Interest income Corporate expense Minority interest income Intersegment eliminations Consolidated income before taxes Reconciliation of assets: Reportable segment assets Investment in equity affiliates Corporate assets Elimination of intersegment balances Consolidated assets $ $ 420,000 30,000 10,000 (60,000) 400,000 $ 115,000 30,000 10,000 (5,000) (15,000) (30,000) $ 105,000 $ 530,000 300,000 200,000 (30,000) $1,000,000 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 15-17 Solution P15-7 Reportable segments Revenue test Segment Food Packing Textile All other Industry Segment Revenue $1,010,000 560,000 330,000 400,000 $2,300,000    Test Value (10%  $2,300,000) $230,000 230,000 230,000   < Test Value (10%  $300,000) $30,000 30,000 30,000    Segment Test Value (10%  $2,000,000) $200,000 200,000 200,000 Operating Reportable Segment yes yes yes Operating profit test Segment Food Packing Textile All other Operating Profit $110,000 110,000 5,000 75,000 $300,000 Reportable Segment Yes Yes No Asset test Segment Food Packing Textile All other Operating Assets $ 750,000 500,000 350,000 400,000 $2,000,000 Reportable Segment Yes Yes Yes Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Segment and Interim Financial Reporting 15-18 Solution P15-7 (continued) Cob Company Operations in Different Segments at or for the year ended December 31, 2011 (Data in Thousands of Dollars) Food Industry Packing Industry Textile Segments Foreign Operation All Other Totals 950 $500 $300 $250 $400 $2,400 Revenues Sales to unaffiliated customers Intersegment sales at market $ 60 60 30 50 Total Segment Sales $1,010 $560 $330 $300 $400 Operating profit Segment operating Profit $ 110 $110 $ $ 25 $ 75 Income before taxes $ 110 $110 $ $ 25 $ 75 $ Assets Identifiable assets $ 700 $500 $325 $200 $400 $2,125 Reconciliation of revenue: Revenue from reportable segments Other segment revenue Intersegment eliminations Income from equity investees Consolidated revenue 200 $2,600 $2,200 400 (200) 100 $2,500 Reconciliation of income: Reportable segment income Other segment income Income from equity investees Interest expense Corporate expense Consolidated income before taxes $ Reconciliation of assets: Reportable segment assets Other segment assets Investment in equity affiliates Corporate assets Consolidated assets $1,725 400 1,000 50 $3,175 $ 250 75 100 (20) (25) 380 325 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 15-19 Solution P15-8 Tor Corporation Schedule of Income by Quarter for 2011 First $50,000  20% Remainder ($160,000 – 50,000)  34% Less amount subject to dividends received deduction ($20,000  80%  34%) $ 10,000 37,400 Total tax for the year Total Income Effective tax rate $ 41,960 $160,000 26.225% Income year-to-date Quarterly period income Income tax expense* Net income * (5,440) 1st Quarter $20,000 2nd Quarter $50,000 3rd Quarter $110,000 4th Quarter $160,000 $20,000 (5,245) $14,755 $30,000 (7,868) $22,132 $ 60,000 $ 50,000 $160,000 (15,734) (13,113) (41,960) $ 44,266 $ 36,887 $118,040 Income tax expense computations: 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter $20,000  26225 = $5,245 $50,000  26225 = $13,113 - $5,245 = $7,868 $110,000  26225 = $28,847 - $13,113 = $15,734 $160,000  26225 = $41,960 - $28,847 = $13,113 Year 2011 $160,000 ... occurring items Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Chapter 15 15-3 SOLUTIONS TO EXERCISES Solution E15-1 d a d b d b Solution E15-2 Revenue tests 10% revenue... report evaluated by the chief operating decision maker Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Segment and Interim Financial Reporting 15-6 Solution E15-6... $558,000 Find more slides, ebooks, solution manual and testbank on www.downloadslide.com Segment and Interim Financial Reporting 15-8 SOLUTIONS TO PROBLEMS Solution P15-1 Reportable segments