Q1. 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 2015.
|
A
|
B
|
C
|
D
|
E
|
|
Sales revenue
|
$57,700
|
$77,000
|
$582,100
|
$35,100
|
$54,900
|
|
Cost of goods sold
|
20,600
|
51,100
|
273,000
|
20,600
|
31,800
|
|
Operating expenses
|
10,060
|
57,700
|
244,800
|
12,110
|
18,600
|
|
Total expenses
|
30,660
|
108,800
|
517,800
|
32,710
|
50,400
|
|
Operating profit (loss)
|
$27,040
|
$(31,800)
|
$64,300
|
$2,390
|
$4,500
|
|
Identifiable assets
|
$39,000
|
$89,900
|
$508,000
|
$74,500
|
$51,100
|
Sales of segments B and C included intersegment sales of $24,610 and $101,770, respectively.
(a) Determine which of the segments are reportable based on the:
(1) Revenue test.
(2) Operating profit (loss) test.
(3) Identifiable assets test.
(b) Prepare the necessary disclosures required by GAAP.
Q2. The comparative balance sheets for Hinckley Corporation show the following information.
|
December 31
|
|
2014
|
2013
|
|
Cash
|
$38,140
|
$14,690
|
|
Accounts receivable
|
15,030
|
10,650
|
|
Inventory
|
20,890
|
9,490
|
|
Investments
|
-0-
|
3,770
|
|
Buildings
|
-0-
|
30,630
|
|
Equipment
|
47,280
|
21,460
|
|
Patents
|
5,600
|
6,840
|
|
$126,940
|
$97,530
|
|
|
|
|
Allowance for doubtful accounts
|
$3,810
|
$5,060
|
|
Accumulated depreciation-equipment
|
2,870
|
5,100
|
|
Accumulated depreciation-building
|
-0-
|
6,120
|
|
Accounts payable
|
5,600
|
3,770
|
|
Dividends payable
|
-0-
|
4,340
|
|
Notes payable, short-term (nontrade)
|
2,420
|
3,820
|
|
Long-term notes payable
|
32,710
|
25,980
|
|
Common stock
|
43,570
|
33,290
|
|
Retained earnings
|
35,960
|
10,050
|
|
$126,940
|
$97,530
|
Additional data related to 2014 are as follows.
1. Equipment that had cost $12,820 and was 40% depreciated at time of disposal was sold for $2,540.
2. $10,280 of the long-term note payable was paid by issuing common stock.
3. Cash dividends paid were $4,340.
4. On January 1, 2014, the building was completely destroyed by a flood. Insurance proceeds on the building were $32,270 (net of $2,600 taxes).
5. Investments (available-for-sale) were sold at $1,300 above their cost. The company has made similar sales and investments in the past.
6. Cash was paid for the acquisition of equipment.
7. A long-term note for $17,010 was issued for the acquisition of equipment.
8. Interest of $2,120 and income taxes of $8,280 were paid in cash.
Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country.