Solution-Prepare a schedule that reports on the revenues

Prepare a schedule that reports on the revenues and profit

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Reference no: EM132880429

Problem - Segment Reporting - Parks Conglomerate Company does business in several different industries. The following is a 2016 condensed income statement for the entire company:

Sales		$300,000
Less:
Cost of goods sold	$140,000
Depreciation expense	30,000
Other operating expenses	60,000
Total expenses		(230,000)
Pretax income		$70,000
Income tax expense		(21,000)
Net income		$49,000
Earnings per share (20,000 shares)		$2.45

Parks has two major operating segments, A and B. No other operating segment contributes 10% or more of the company's activities. Segments A and B make no sales to each other or to the other segments of the company. An analysis reveals that $2,000 of the total depreciation expense and $6,000 of the total other operating expenses are related to general corporate activities. The remaining expenses and total revenues are directly allocable to segment activities according to the following percentages:

	Percent Identified with
	Segment A	Segment B	Other Segments
Sales	40%	46%	14%
Cost of goods sold	35	50	15
Depreciation expense	40	45	15
Other operating expenses	42	40	18

Required - Prepare a schedule that reports on the revenues and profit of Segments A and B and the other operating segments of Parks. Reconcile these amounts with the related totals on the preceding income statement. Include notes summarizing the depreciation related to each operating segment and the computation of segment profits.

Reference no: EM132880429

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Prepare a schedule that reports on the revenues and profit

Reference no: EM132880429

Reference no: EM132880429

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