Intermediate accounting by robles empleo ch 9 answers 2008

Chapter – Interim Reporting and Segment Reporting 9.1 Angel Company Angel Company Income Statement For the Quarter Ended October 31, 2007 Net sales (30% x 9,000,000) P Cost of goods sold Gross profit (38% x 2,700,000) P Operating expenses * Profit from Continuing Operations Income Tax Net Profit from Continuing Operations Discontinued Operations, net of income tax savings of P455,000 Net profit (loss) *Operating Expenses: Variable = 30% x 600,000 Fixed = (960,000 – 600,000) /4 Total 9.2 P P P 2,700,00 1,674,00 1,026,00 270,000 756,000 241,920 514,080 (845,000 ) (330,920 ) P180,000 90,000 P270,000 Galaxy Company Galaxy Company Income Statement For the Month of October 2006 Net sales Cost of goods sold: Merchandise Inventory, October Purchases Total goods available for sale Merchandise inventory, October 31 Cost of sales Gross profit Selling expenses General and administrative expenses Net profit 9.3 P 239,100 P 280,000 215,000 495,000 372,600 122,400 116,700 (54,700) (19,000) 43,000 P P P Blue Bay Considering the criteria, Segment D is not qualified because majority of its revenue comes from transactions with other segments Minimum required assets Minimum required revenue Minimum required operating result (profit or loss) Reportable segments are A, B, C and E (61M/66M is 92%) 45 P5,000,000 8,600,000 2,000,000 The 75% test has also been met Chapter – Interim Reporting and Segment Reporting 9-4 Minimum operating result (profit or loss) P1,100,000 Reportable segments based on the above test are B, D and E 9.4 Polygon Corporation Minimum required revenues Minimum required operating profit Minimum required identifiable assets P3,275,000 580,000 6,800,000 Identified reportable segments, based on any of the above tests: A, B, C, D and E Multiple Choice Interim Reporting MC1 MC2 MC3 MC4 MC5 MC6 MC7 MC8 MC9 MC10 MC11 MC12 MC13 MC14 MC15 A D B B A B B C B A B B B C A MC16 MC17 MC18 MC19 MC20 C A D A D MC1 MC2 MC3 MC4 MC5 MC6 MC7 D A B B C C A 320,000 X ¼ = 80,000 End of January = 200,000 + 50,000 – 192,000 = 58,000 End of February = 58,000 + 380,000 – 408,000 = 30,000 End of March = 30,000 + 704,000 – 604,000 = 130,000 (600,000 x ½) + (1,200,000 x ½) = 900,000 (25,000,000 X 10%) – (10,000,000 X 5%) = 2,000,000 (45,000,000 X 10%) – (20,000,000 X 5%) = 3,500,000 Segment Reporting 46 Chapter – Interim Reporting and Segment Reporting MC8 MC9 MC10 MC11 MC12 MC13 MC14 MC15 B A D C D A C B 10% (1,000,000 + 300,000) 500,000 – 225,000 – (240,000 X 500,000/1,500,000) 2,000,000 – 900,000 – (3,000,000 X 2M/10M) 10% (153,000,000 – 140,000,000) 4,000,000 – 2,200,000 – (1,200,000 X 1,800,000/3,000,000)=1,080,000 47 ...Chapter – Interim Reporting and Segment Reporting 9- 4 Minimum operating result (profit or loss) P1,100,000 Reportable segments based on the above test are B, D and E 9. 4 Polygon Corporation... A, B, C, D and E Multiple Choice Interim Reporting MC1 MC2 MC3 MC4 MC5 MC6 MC7 MC8 MC9 MC10 MC11 MC12 MC13 MC14 MC15 A D B B A B B C B A B B B C A MC16 MC17 MC18 MC 19 MC20 C A D A D MC1 MC2 MC3... 200,000 + 50,000 – 192 ,000 = 58,000 End of February = 58,000 + 380,000 – 408,000 = 30,000 End of March = 30,000 + 704,000 – 604,000 = 130,000 (600,000 x ½) + (1,200,000 x ½) = 90 0,000 (25,000,000