Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows: Sales to outside parties Intersegment transfers Interest income from outside parties. Interest income from intersegment loans Operating expenses Interest expense Tangible assets Intangible assets Intersegment loans (debt) Plastics $6,855 a. Revenue test: b. Profit or loss test: c. Asset test: 163 0 0 4,334 82 1,577 93 0 Metals $2,414 185 40 0 1,822 37 3,256 415 0 Lumber $ 741 150 27 0 1,126 72 584 0 0 Ecru does not allocate its $1,400,000 in common expenses to the various segments. Perform testing procedures to determine Ecru's reportable operating segments. Paper $ 452 162 0 0 684 22 831 69 0 Finance $ 0 0 48 213 37 108 209 0 718

Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows: Sales to outside parties Intersegment transfers Interest income from outside parties. Interest income from intersegment loans Operating expenses Interest expense Tangible assets Intangible assets Intersegment loans (debt) Plastics $6,855 a. Revenue test: b. Profit or loss test: c. Asset test: 163 0 0 4,334 82 1,577 93 0 Metals $2,414 185 40 0 1,822 37 3,256 415 0 Lumber $ 741 150 27 0 1,126 72 584 0 0 Ecru does not allocate its $1,400,000 in common expenses to the various segments. Perform testing procedures to determine Ecru's reportable operating segments. Paper $ 452 162 0 0 684 22 831 69 0 Finance $ 0 0 48 213 37 108 209 0 718

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 57P: Grammatico Company has just completed its third year of operations. The income statement is as...

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Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows: Sales to outside parties Intersegment transfers Interest income from outside parties Interest income from intersegment loans Operating expenses Interest expense Tangible assets Intangible assets Intersegment loans (debt.) Plastics $6,870 a. Revenue test: 163 0 0 4,354 83 1,567 94 Metals $2,419 186 41 0 1,832 38 3,261 416 0 Lumber $ 746 151 28 0 1,136 73 589 0 0 Ecru does not allocate its $1,360,000 in common expenses to the various segments. " Perform testing procedures to determine Ecru's reportable operating segments. Paper Finance $ 457 $0 163 0 0 689 20 836 70 0 0 49 214 38 109 214 0 719
Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows: Plastics Metals Lumber Paper Finance Sales to outside parties $ 6,325 $ 2,144 $ 636 $ 347 $ 0 Intersegment transfers 108 131 96 108 0 Interest income from outside parties 0 19 6 0 27 Interest income from intersegment loans 0 0 0 0 159 Operating expenses 3,914 1,612 916 579 16 Interest expense 61 16 51 31 87 Tangible assets 1,291 2,986 314 561 104 Intangible assets 72 361 0 48 0 Intersegment loans (debt) 0 0 0 0 664 Ecru does not allocate its $1,250,000 in…
Chevalier Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows: Accounts Sales to outside parties Intersegment sales Interest income from outside parties Interest income from intersegment loans Operating expenses Interest expense Tangible assets Intangible assets Intersegment loans (debt) Plastics $ 6,694 Metals $ 2,354 Lumber $ 711 148 173 138 Paper $ 422 150 Finance $ 0 0 0 34 21 0 42 0 0 0 0 201 4,214 76 1,762 1,066 654 31 31 66 28 102 1,501 87 3,196 524 771 179 0 403 0 0 63 0 0 0 706 Chevalier does not allocate its $1,460,000 in common expenses to the various segments. Required: a1. Perform revenue test procedure to determine Chevalier's reportable operating segments. a2. Perform profit or loss test procedure to determine Chevalier's reportable operating segments. a3. Perform asset test…
Problem 8-35 (Algo) (LO 8-2) Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance. It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows: Sales to outside parties Intersegment transfers Interest income from outside parties Interest income from intersegment loans Operating expenses Interest expense Tangible assets Intangible assets Intersegment loans (debt) 0 Plastics Metals $6,770 $2,369 153 176 37 0 1,792 34 3,211 406 0 4,274 79 1,517 90 0 0 a. Revenue test: b. Profit or loss test: c. Asset test: Lumber $ 726 141 24 0 1,096 69 539 0 0 Ecru does not allocate its $1,340,000 in common expenses to the various segments. Perform testing procedures to determine Ecru's reportable operating segments. Paper $437 153 0 0 669 22 786 66 0 Finance $0 0 45 204 34 105 194 0 709
Lechon Company provided the following data for the current year: Sales Cost of goods sold Expenses Depreciation Income tax expense The entity has two major reportable segments, A and B. An analysis revealed that P1,000,000 of the total depreciation expense and P2,000,000 of the expenses are related to general corporate activities. The remaining expenses and sales are directly allocable to segment activities according to the following percentages: Sales Cost of goods sold Expenses Depreciation P60,000,000 28,000,000 14,000,000 4,000,000 4,000,000 Segment A 40% 35 40 40 Segment B 45% Others 15% 15 20 15 50 40 45 What amount should be reported as net income of Segment A?
To manage its operations, Leaf Company reports to top management on five different segments which are consolidated appropriately for the annual financial statements. Information about each segment included in the current year's consolidated statements appears in the table below (in 000's): Sales to outside parties Intersegment revenues Outside parties interest income Intersegment interest income Operating expenses Interest expense Tangible assets Intangib assets a. the revenue test, Tools $8,220 140 -0- -0- 5,090 80 1,620 90 Leaf Company has $305,000 of corporate expenses that it does not allocate to the segments. Carry out: c. the asset test b. the profit and loss test, and Batteries Adhesives Plastics $2,790 170 30 -0- 2,100 20 3,880 470 $830 130 10 -0- 1,390 170 890 -0- $450 140 -0- -0- 750 40 730 60 Finance to determine which segments are separately reportable. Clearly show the results of each test and your decision on each test. $-0- -0- 250 210 20 110 140 870
An entity and its divisions reported the following for the current year: Sales to unaffiliated customers 40,000,000 Intersegment sales of product similar to those sold to unaffiliated customers 12,000,000 Interest earned on loans to other operating segments 1,000,000 The entity and all of its divisions are engaged solely in manufacturing operations. To qualify as reportable segment, the segment revenue should at least be what amount? A. 5,300,000 B. 4,100,000 C. 5,200,000 D. 4,000,000
Identifying Operating and Nonrecurring Income Components Following is the The Dow Chemical Company income statement. ($ millions) For Year Ended December 31 Net sales Cost of sales Research and development expenses Selling, general, and administrative expenses Amortization of intangibles Restructuring, goodwill impairment and asset-related charges-net Integration and separation costs Asbestos-related charge Equity in earnings of nonconsolidated affiliates Sundry income (expense)-net Interest expense and amortization of debt discount Income from continuing operations before income taxes Provision (Credit for income taxes on continuing operations) Income from continuing operations, net of tax Loss from discontinued operations, net of tax Net income 2017 2016 $62,484 $48,158 50,414 37,640 2,110 1,584 4,021 2,956 1,013 544 3,280 595 1,101 349 1,113 764 442 966 1,452 1,082 858 1,193 4,413 (476) 9 1,669 4,404 (77) $1,592 $4,404
Financial Information for Powell Panther Corporation is shown below: Powell Panther Corporation: Income Statements for Year Ending December 31 (millions of dollars) Sales Operating costs excluding depreciation and amortization EBITDA Depreciation and amortization Earnings before interest and taxes (EBIT) Interest Assets Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Accruals Earnings before taxes (EBT) Taxes (25%) Net Income Common dividends Powell Panther Corporation: Balance Sheets as of December 31 (millions of dollars) 2020 2021: $ b. What was the 2021 free cash flow? 2021 $3,300.0 2,805.0 $495.0 $ 2020 $3,000.0 2,550.0 $450.0 72.0 $378.0 66.0 $312.0 124.8 $187.2 $181.6 $149.8 -Select- 86.0 $ 409.0 72.6 $ 336.4 134.6 $201.8 2021 50.0 $ 483.0 725.0 $1,258.0 864.0 $2,122.0 $264.0 225.0 Notes payable 66.0 Total current liabilities $ 555.0 Long-term bonds 660.0 Total liabilities…
The balance sheet for Revolution Clothiers is shown below. Sales for the year were $3,190,000, with 75 percent of sales sold on credit. REVOLUTION CLOTHIERS Balance Sheet 20X1 Assets Cash Accounts receivable Inventory Plant and equipment Total assets $ 24,000 283,000 266,000 450,000 a. Current ratio b. Quick ratio c. Debt-to-total-assets ratio d. Asset turnover e. Average collection period $ 1,023,000 Accounts payable Accrued taxes Liabilities and Equity times times % times days Bonds payable (long-term) Common stock Paid-in capital Retained earnings Total liabilities and equity Compute the following ratios: Note: Use a 360-day year. Do not round intermediate calculations. Round your answers to 2 decimal places. Input your debt-to- total assets answer as a percent rounded to 2 decimal places. $ 279,000 107,000 130,000 100,000 150,000 257,000 $ 1,023,000
The following information pertains to Xavier Corp. and its divisions for the year ended 12/31/20: Sales to unaffiliated customers $4,000,000 Intersegment sales of products similar to those sold to unaffiliated customers 900,000 60,000 Interest earned on loans to other operating segments Xavier and all of its divisions are engaged solely in manufacturing operations. Xavier has a reportable segment if that segment's revenue exceeds a. $496,000. b. $490,000. $406,000. $400,000. C. d.
Franklin Corporation operates three investment centers. The following financial statements apply to the investment center named Bowman Division. BOWMAN DIVISION Income Statement For the Year Ended December 31, Year 2 $106,280 59,575 46,705 Sales revenue Cost of goods sold Gross margin Operating expenses Selling expenses Depreciation expense (2,650) (4,015) 40,040 Operating income Nonoperating item ( 4,900) $ 35,140 Loss on sale of land Net income BOWMAN DIVISION Balance Sheet As of December 31, Year 2 Assets Cash $ 12,592 Accounts receivable Merchandise inventory Equipment less accumulated depreciation Nonoperating assets 40,456 37,100 90,358 9,700 Total assets $190,206 Liabilities $ 9,567 Accounts payable Notes payable Stockholders' equity 64,000 78,000 38,639 Common stock Retained earnings Total liabilities and stockholder's equity $190,206