Question

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 Interest earned on loans to other operating segments 60,000 Xavier and all of its divisions are engaged solely in manufacturing operations. Xavier has a reportable segment if that segment's revenue exceeds a. $490,000 b. $406,000 c. $400,000 d. $496,000

Answer 1

Answer:

a. $490,000

Explanation:

Segment revenue will be recorded it if exceeds the limit of 10% of total sales .In this question sales made to unaffiliated customers and intersegment saels is the total sales value.

Sales to unaffiliated customers = $4,000,000

Intersegment Sales similar to Sold to unaffiliated customers = $900,000

Total Sales = $4,000,000 + $900,000 = $4,900,000

Segment revenue will be recorded if total sales increases $490.000 ($4,900,000 X 10%)