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Segment Reporting - Lagan
Segment Reporting - Lagan
BS Accountancy IV
SEGMENT REPORTING
Part I. Theoretical
1. Estes Company has assembled the following data for its divisions for the past year:
Division A Division B
Average operating assets $500,000 ?
Sales ? $520,000
Net operating income $100,000 $20,300
Turnover 1.25 4
Margin ? 3.9%
Minimum required rate
of return 14% ?
Residual income ? $6,000
71.B Division A's sales are:
a. $400,000. c. $125,000.
b. $625,000. d. $200,000.
2. The Holmes Division recorded operating data as follows for the past year:
Sales .......................... $200,000
Net operating income ........... 25,000
Average operating assets ....... 100,000
Stockholders' equity ........... 80,000
Residual income ................ 13,000
C For the past year, the return on investment was:
a. 15.75%. c. 25.00%
b. 20.50%. d. 31.25%.
A For the past year, the margin was:
a. 12.50%. c. 14.75%.
b. 13.00%. d. 15.00%.
D For the past year, the turnover was:
a. 25. c. 4.
b. 10. d. 2.
B For the past year, the minimum required rate of return was:
a. 11%. c. 13%.
b. 12%. d. 14%.
3.The Baily Division recorded operating data as follows for the past two years:
Year 1 Year 2
Sales ....................... ? $1,200,000
Stockholders' equity ........ $540,000 720,000
Average operating assets .... $600,000 ?
Margin ...................... 15% ?
Return on investment ........ 22.5% 18%
Baily Division's turnover was exactly the same in both Year 1 and Year 2.
4. The following selected data pertain to the belt division of Allen Corp. for last
year:
Sales ............................ $500,000
Average operating assets ......... $200,000
Net operating income ............. $80,000
Turnover ......................... 2.5
Minimum required return .......... 20%
5. The following selected data pertain to Beck Co.'s Beam Division for last year:
Sales ............................. $400,000
Variable expenses ................. $100,000
Traceable fixed expenses .......... $250,000
Average operating assets .......... $200,000
Minimum required rate of return ... 20%