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

Marigold Corp.

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

a. Segments A, B, C, and D

Step-by-step 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.