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Problem A
Blake Company and its division are engaged solely in manufacturing operations. The following data
pertain to the industries in which operations were conducted for the year ended December 31, 2015.
Segments
A
B
C
D
E
F
Total Revenue
Operating Profit
Identifiable Assets
20,000,000
3,600,000
40,000,000
16,000,000
2,800,000
36,000,000
12,000,000
2,400,000
28,000,000
6,000,000
1,200,000
16,000,000
9,000,000
1,400,000
14,000,000
3,000,000
600,000
6,000,000
66,000,000
12,000,000
140,000,000
In its segment information for 2014, how many reportable segments does Blake Company have?
__________ Five
Thresholds:
A. Revenue criterion: 66M x 10% = 6.6M
B. Operating Profit: 10% x 12,000,000 = 1.2M
C. Identifiable Assets: 10% x P140 M = 14M
Segment F has not met any of the criteria.
Problem B
Presented below are four segments that have been identified by Paris Company:
Segments
A
B
C
D
Total Revenue
Operating Profit (Loss)
Identifiable Assets
1,500,000
200,000
6,000,000
4,000,000
(350,000)
6,000,000
1,500,000
30,000
3,000,000
600,000
20,000
1,500,000
7,600,000
16,500,000
For which of the segments would information have to be disclosed in accordance with IFRS 8?
__________
Segments, A, B, and C.
Thresholds:
A, revenue: 7.6M x 10% = 760,000
B. profit/loss (absolute amount): (350,000) x 10% = 35,000
C. Identifiable Assets: 16.5 M x 10% = 1,650,000
Segment D does not meet any of the thresholds.
Problem C
Uranus Company and its divisions are engaged solely in manufacturing. The following data pertain to the
industries in which operations were conducted for the year ended December 31, 2015:
Division
Operating Profit/(Loss)
A
30,000,000
B
10,000,000
C
(8,000,000)
D
(2,000,000)
E
5,000,000
1.
In its 2015 financial statements, Uranus Company should disclose an operating segment if
operating profit or loss is at least _________. 4,500,000
Profit: 45M; Loss 10M; 45M higher (in absolute amount)
45M x 10% = 4,500,000
2.
Which of the divisions qualified for this threshold? __________A, B, C, E
Problem D
Bernice 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 divisions sales in
relation to Bernices aggregate sales. In 2015, Division 1 had sales of P10,000,000, which was 20% of
Bernices total sales, and had traceable operating costs of P6,000,000. In 2015, Bernice incurred
operating costs of P1,500,000 that were not traceable to any divisions. In addition, Bernice incurred
interest expense of P500,000 I, 2015. In reporting segment information, what amount should be shown
as operating profit for Division 1 in 2015? __________ 3,700,000