Question

Presented below are four segments that have been identified by Marigold Corp.:

Operating
Segments Total Revenue Profit (Loss) Identifiable Assets
A $254500 $30300 $899000
B 599500 (55700) 801500
C 225500 52004 49000
D 90800 4700 226000

For which of the segments would information have to be disclosed in accordance with professional pronouncements.

a. Segments A, B, C, and B
b. Segments A, B, and C
c. Segments A and B
d. Segments A and D

Answer 1

Answer:

Marigold Corp.

The segments to be disclosed in accordance with professional pronouncements are:

a. Segments A, B, C, and D

Explanation:

a) Data and Calculations:

Operating

Segments   Total Revenue    Profit (Loss)    Identifiable Assets

A                     $254,500          $30,300             $899,000

B                       599,500           (55,700)                801,500

C                      225,500            52,004                   49,000

D                        90,800               4,700                226,000

Total             $1,170,300           $31,304            $1,975,500

b) According to professional pronouncements and U.S. Generally Accepted Accounting Principles (GAAP), public companies must report a segment if the segment accounts for 10% of total revenues, 10% of total profits, or 10% of total assets. The main purpose for presenting financial information by segments is to provide users of financial statements with information for making more informed economic decisions.