Solution-Calculate sales to unaffiliated customers within a

Calculate sales to unaffiliated customers within a country

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Reference no: EM132432201

Question - Taft Corporation operates primarily in the United States. However, a few years ago, it opened a plant in Spain to produce merchandise to sell there. This foreign operation has been so successful that during the past 24 months the company started a manufacturing plant in Italy and another in Greece. Financial information for each of these facilities follows:

	Spain	Italy	Greece
Sales	$185,000	$610,000	$460,000
Intersegment transfers	0	100,200	70,000
Operating expenses	182,000	216,000	200,000
Interest expense	20,000	33,000	23,000
Income taxes	71,000	23,000	38,000
Long-lived assets	100,000	160,000	110,000

The company's domestic (U.S.) operations reported the following information for the current year:

Sales to unaffiliated customers	$4,540,000
Intersegment transfers	447,000
Operating expenses	2,430,000
Interest expense	146,000
Income taxes	839,000
Long-lived assets	2,220,000

Taft has adopted the following criteria for determining the materiality of an individual foreign country:

a. Calculate sales to unaffiliated customers within a country and as a percent of the consolidated sales.

b. Calculate long-lived assets within a country and as a percentage of the long-lived assets.

c. Apply Taft's materiality tests to identify the countries which are 10 percent or more of consolidated sales or consolidated long-lived assets to be reported separately.

Reference no: EM132432201

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Calculate sales to unaffiliated customers within a country

Reference no: EM132432201

Reference no: EM132432201

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