Prepare the necessary disclosures required by GAAP

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Question - Headland Corporation is a diversified company that operates in five different industries: A, B, C, D, and E. The following information relating to each segment is available for 2018.

 

A

B

C

D

E

Sales revenue

$40,000

$75,000

$582,000

$35,000

$55,000

Cost of goods sold

19,300

49,500

270,600

19,400

30,500

Operating expenses

9,800

40,800

231,000

12,300

17,600

Total expenses

29,100

90,300

501,600

31,700

48,100

Operating profit (loss)

$11,100

$(15,300)

$80,400

$3,300

$6,900

Identifiable assets

$34,600

$81,500

$504,000

$66,000

$50,600

Sales of segments B and C included intersegment sales of $19,900 and $99,200, respectively.

(a) Determine which of the segments are reportable based on the:

(1) Revenue test

(2) Operating profit (loss) test

(3) Identifiable assets test.

(b) Prepare the necessary disclosures required by GAAP.

Reference no: EM132791689

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