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Intermediate Accounting (Kieso)
Found in: Page 1450

Short Answer

Cineplex 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.






Sales revenue






Cost of goods sold






Operating expenses






Total expenses






Operating profit (loss)






Identifiable assets






Sales of segments B and C included intersegment sales of $20,000 and $100,000, respectively.


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

  1. Revenue test.

Segment C is reportable.

See the step by step solution

Step by Step Solution

Meaning of Revenue

Revenue is the profit a firm makes from its operations. Product sales, consultancy fees, other services, rent, and even commission-based fees are all examples of income sources.

Determining the segments that are reportable

The revenue test is computed as $78,500.

Working Notes:

Only Segment C ($580,000) meet this test.

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