West Corporation reported the following consolidated data fo

West Corporation reported the following consolidated data for 20X2 Sales Consolidated income before taxes Total assets $ 809,000 144,000 1,360,000 Data reported for West\'s four operating divisions are as follows Division A $270,000 60,000 261,000 551,000 Division C Division D Division B $162,000 Sales to outsiders Interseqment sales Traceable costs Assets $330,000 14,000 306,000 516,000 $47,000 17,000 98,000 91,000 106,000 121,000 Intersegment sales are priced at cost, and all goods have been subsequently sold to nonaffiliates. Some joint production costs are allocated to the divisions based on total sales. These joint costs were $45,000 in 20X2. The company\'s corporate center had $36,000 of general corporate expenses and $136,000 of assets that the chief operating decision maker did not use in making the decision regarding the operating segments

Solution

a.1. Operating Segments A B C D Corporate Admin. Combined Intersegment Elimination Consolidated Revenues: Sale to Outsider 270,000 162,000 330,000 47,000 809,000 809,000 Intersegment sales 60,000 14,000 17,000 91,000 -91,000 0 Total Revenue 330,000 162,000 344,000 64,000 900,000 -91,000 809,000 Operating Costs: 0 Traceable costs -261,000 -106,000 -306,000 -98,000 -771,000 91,000 -680,000 Allocated [WN1] -16,500 -8,100 -17,200 -3,200 -45,000 -45,000 Segment profit/(loss) 52,500 47,900 20,800 -37,200 84,000 84,000 Other items: 0 General Corporate expenses -36,000 -36,000 -36,000 Income from continuing operations 52,500 47,900 20,800 -37,200 -36,000 48,000 48,000 Assets: 0 Segment 551,000 121,000 516,000 91,000 1,279,000 1,279,000 General Corporate 136,000 136,000 136,000 Total Assets 551,000 121,000 516,000 91,000 136,000 1,415,000 1,415,000 WN 1. Allocated- A - $45,000 * (330,000/900,000) = $16500 B - $45,000 * (162000/900,000) = $8100 C - $45,000 * (344000/900,000) = $17200 D - $45,000 * (64000/900,000) = $3200 2. Schedules showing segments are reportable- Segments Revenue Segment Profits Segment Assets A Yes Yes Yes B Yes Yes Yes C Yes Yes Yes D No No No i). Separately reportable if segment revenue greater than or equal to (Combined Revenue * .10) = $809,000* .10 = $89000 ii). Separately reportable if separate segment profit or loss greater than or equals to $8400(total segment profit i.e. A,B and C of $84000 * 0.10) iii). Separately reportable if segment assets greater than or equal to $127900 (total segment assets $1279000* 0.10) A,B and C are separately reportable. b. Country Revenue Long-Lived Assets A Domestic Yes 275,500 Yes B Foreign Yes 60,500 No C Foreign Yes 258,000 Yes D Foreign No 45,500 No i. separately reportable if revenue to outside greater than or equal to $76,800 ( Combined revenue of $768,000 * .10) ii. Separately reporatble if long- lived, productive assets, which are one-half of total assets, are greater than or equal to (Total Assets $1279000/2 = $639500 * .10) = $63950 Foreign countries B and C are separately reportable.