Additional current year expenses, not included above,
are as follows:
Indirect operating expenses
P360,000
General corporate expenses
240,000
In the measure of segment profit or loss reviewed by
t h e c h ie f o p e r a t in g d e c is io n m a k e r , a p p r o p r ia t e
common operating expenses are allocated to segments
based on the ratio of a segment's sales to total sales,
but general corporate expenses are not. Segment C's
current year profit for external reporting purposes was
a. P100,000
c. P 1 6 0, 0 0 0
b. P130,000
d. P250,000
17. Norte Company has three manufacturing divisions,
each of which has been determined to be a reportable
segment. Common costs are appropriately allocated
on the basis of each division's sales in re lation to
Norte's aggregate sales. In the current year, Division I
had sales of P6,000,000, which was 20% of Norte's
total s ale s, and had tr aceab le operat ing cost s of
P3, 800, 000. Nort e incurr ed ope rat ing cost s of
P1,000,000 that were not directly traceable to any of
the divisions.
In addition, Norte incurred interest
expense of P600,000.
In r ep or t in g s eg me nt
as
in fo r ma t io n -, w hat a mo u nt s ho u ld be sh o wn
operatinq profit of Division. I for the current year?
a. P2,000,000
c. P1 : 880,000
b . P 1, 40 0, 0 0 0
d. P2,20 0,0 00
DRILL
1. Australia Company has three business segments with
the following Information:
In its segment information, which is(are) reportable
segment(s)?
a. Segment 1, 2, 3, 4, & 5
b. Segment 1, 2, 3 & 4
c. Segment 1, 2 & 4
d. Segment 3 & 5
One
Two
Three
P8,000,000 P4,000,000 P6,000,000
Sales to outsiders
Intersegment
transfers
Interest income outsiders
Interest income Intersegment loans
600,000
400,000
300,000
1,000,000 1,400,000
500,000
400,000
600,000
500,000
What is the minimum amount of revenue that each of
those segments must have to be ccnsicered
reportable'?
a. P1,950,000
c. P2,2 50. 000
0. P2,100,000
d. P2,37 0,0 00
2 In preparing its segment-reporting schedule, the High
Corporation has developed the following information
for each of its 5 segments:
Segment
1
2
3
4
5
Total
Revenue
P1,400,000
1,200,000
900,000
1,500,000
500,000
P5,500, 000
Expenses
P 800,000
1,300,000
750,000
1,900,000
220,000
P4,970,000
The reportable business segment(s) using the segment
result test is (are)
a. Segm ent s 1, 2, 3, 4 & 5
b. Segment 1, 2, 3 & 4
c. Segments 1, 3, & 5
-d. Segments 1, 3, 4 & 5
3. Fragment Corporation and its divisions are engaged
solely in manufacturing. The following data pertain to
the industries in which operations were conducted for
current year:
Segment
1
2
3
4
5
Operating Profit (Loss)
8,000,000"
2,000,000
(1,300,000)
3,000,000
(1,000,000)
The following segments have been identified for an
entity, along with their sales. No segment qualifies on
any other criteria for determining reportable segments.
Sales for each segment and the total for the entity
follow:
SegExternal
Inter-segment
Sales
ment
Sales
Total
1
P10,000,000
P 3,000,000
P13,000,000
2
2,000,000
1,500,000
3,500,000
3
2,600,000
1,100,000
3,700,0004
4,700,000
2,300,000
7,000,000"
5
2,800,000
500,000
3,300,000
3,700,0006
3,000,000
700,000
7
4,400,000
1,400,000
5,800,000-
P30,000,000
P10,000,000
P40,000,000
What is the minimum number of reportable segments
for this entity?
a. J
c. 5
b, 4
d. 6
5 . C D O C o m p a n y , a p u b lic ly o w n e d c o r p o r a t io n , is
subject to the requirements for segment reporting. In
its income statement for the current year ended, CDO
reported revenue of P150,000,000, operating expenses
of P10 0,000,000 and net income of P50,000,00 0.
O perating expenses include payroll costs of
P20,000,000. CDO's combined identifiable assets of all
industry segments at year end were P80,000,000. The
reported revenue includes P120,000,0000 of sales to
external customers. External revenue reported by
operating segments must be at least
a.
b.
P11 2,50 0,00 0
P 37,500,000
c. P 9 0, 0 3 0, 0 00
d. P 5 0, 00 0 ,0 0 0
SUGGESTED ANSWER
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
D
D
D
D
A
C
A
C
B
D
A
D
A
B
B
C
A
DRILL
1. B
2. D
3. B
4. C
5. C