Question

Lion Lyle Co. is a public company and reports operating segment information. The following information is available for the current reporting year: Sales to Operating ExternalIntersegment Sales lo Segment Revenues Customers $ 70,000 $ 30,000 $100,000 Monk 22,000 4,000 26,000 Nevi 8,000 16,000 24,000 Combined $100,000 $ 50,000 150,000 Elimination (50,000) (50,000) Consolidated $100,000 $100,000 Which operating segment(s) should be reportable segments?

1. None
2. Lion only
3. Lion and Monk only
4. Lion, Monk and Nevi

Answer 1

The operating segment that should be reportable segments are Lion, Monk and Nevi. The right answier is 4

Step-by-step explanation:

In order to know which operating segment should be reportable segments we need to make the following calculations for each segment:

Lion = 100000/150000% = 67%

Monk = 26000/150000%=17%

Nevi= 24000/150000%=16%

The Segment will be reporting segement if combined income is more than 10% of total combined revenue.

Becasue all are above 10% that mean that all will be reportable segments.

Therefore, The operating segment that should be reportable segments are Lion, Monk and Nevi