JNG Corp has 4 segments, the details of which are shown below. All figures are in thousands of dollars. $\begin{array}{|l|r|r|r|}
\hline \text { Segment } & \text { Revenues } & \text { Profits } & \text { Assets } \
\hline \mathrm{A} & \$ 12 & \$ 6 & \$ 40 \
\hline \mathrm{B} & \$ 60 & \$ 2 & \$ 80 \
\hline \mathrm{C} & \$ 35 & \$ 10 & \$ 80 \
\hline \mathrm{D} & \$ 200 & \$ 80 & \$ 20\\hline
\end{array}$ Using only the Profit test, which of the following segment(s) would be reportable?
A) A and B
B) B and D
C) C and A
D) C and D

Question

JNG Corp has 4 segments, the details of which are shown below. All figures are in thousands of dollars. $\begin{array}{|l|r|r|r|}
\hline \text { Segment } & \text { Revenues } & \text { Profits } & \text { Assets } \
\hline \mathrm{A} & \$ 12 & \$ 6 & \$ 40 \
\hline \mathrm{B} & \$ 60 & \$ 2 & \$ 80 \
\hline \mathrm{C} & \$ 35 & \$ 10 & \$ 80 \
\hline \mathrm{D} & \$ 200 & \$ 80 & \$ 20\\hline 
\end{array}$ Using only the Profit test, which of the following segment(s) would be reportable?
A) A and B
B) B and D
C) C and A
D) C and D

Quizplus · Accepted Answer

The Profit test for reportability often requires a segment's profits to be a certain percentage of the total profits of all segments. Segment D has the highest profit at $80,000, and Segment C has the second highest at $10,000. Segments A and B have lower profits at $6,000 and $2,000, respectively.

JNG Corp Has 4 Segments, the Details of Which Are