Joined: 17 Apr 2010 Location: United States
Online Status: Offline Posts: 11
Posted: 04 Jul 2010 at 03:11 | IP Logged
Grum Corp., a publicly owned Corp, is subject to the requirements for segment reporting. In its IS for the year ended Dec 31, 2008, Grum reported revenues of 50 mil. ....Reported revenues include 30 mil of sales to external customers. External revenue reported by operating segments must be at least
Answer:22,500 000 (30 mil x 0.75)
I am completely lost with Wiley explanation. The book offers two different ways of solving such problems
1)Total external revenues x 0.75 = amount of unaffiliated revenue that must be reported
2)Total external revenue must be at least 75% of total consolidation revenue
Please help me clarify the issue with 75% test. Let's assume that in every case we have external and affiliated revenue
Joined: 27 Jun 2010
Online Status: Offline Posts: 337
Posted: 04 Jul 2010 at 06:43 | IP Logged
The external revenue of reportable segments should be >= 75% of the total external revenue for all segments. intersegment revenue is not included in this calculations at all.
__________________ FAR - 07/09/10 - {95}
AUD - 10/02/10 - {96}
BEC - 11/29/10 - {92}
REG - 05/23/11 - {75 would be enough}90 unbelievable, and I AM DONE!!!
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Wiley book/Gleim CD/Gleim simulations
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Topic: 75% Sufficiency test
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