Maurice Tutor
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Segment Disclosu r es in the Financial Statements [CMA Adapted]
Bennett Inc. is a publicly held corporation whose diversified operations have been separated into five industry segments. Bennett is in the process of preparing its annual financial statements for the
year ended December 31, 20X5. The following information has been collected for the preparation of the segment reports required by ASC 280.
BENNETT INC. Selected Data
For the Y ear Ended December 31, 20X5
(in thousands)
|
 Item |
Power T ools |
Fastening Systems |
Household P r oducts |
Plumbing P r oducts |
Security Systems |
|
Sales to Unaffiliated Customers |
 $32,000 |
 $ 4,500 |
 $ 4,800 |
 $3,000 |
 $2,000 |
|
Intersegment Sales |
10,000 |
5,500 |
200 |
1,000 |
 |
|
Total Revenue |
$42,000 |
$10,000 |
$5,000 |
$4,000 |
$2,000 |
|
Cost of Goods Sold |
30,000 |
8,000 |
4,500 |
3,100 |
1,700 |
|
Operating Profit |
4,500 |
1,000 |
(600) |
700 |
(100) |
|
Net Income |
2,600 |
800 |
(750) |
(100) |
(200) |
|
Segment Assets |
50,000 |
23,000 |
17,000 |
6,000 |
4,000 |
Required
a. Determine which of the operating segments are reportable segments for Bennett. Your determi- nation should include all required tests and the results of those tests for each of Bennett’s five segments.
b . The reportable segments determined in ( a ) must represent a substantial portion of Bennett’s total operations when taken together. Describe how to determine whether a substantial portion of Bennett’s operations is explained by its segment information.