Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands; Intersegment loans are receivables): Which operating segments are reportable under the revenue test?
A) Pails and Hardware.
B) Rakes, Pails, and Hardware.
C) Rakes, Hardware, and Accessories.
D) Rakes and Pails.
E) Rakes and Hardware.

Question

Dean Hardware, Inc. is comprised of five operating segments. Information about each of these segments is as follows (in thousands; Intersegment loans are receivables):  Which operating segments are reportable under the revenue test?
A) Pails and Hardware. 
B) Rakes, Pails, and Hardware. 
C) Rakes, Hardware, and Accessories. 
D) Rakes and Pails. 
E) Rakes and Hardware.

Quizplus · Accepted Answer

Under the revenue test, operating segments should be reported separately if their revenue is 10% or more of the combined revenue of all operating segments. 
- Pails segment has revenue of 8,000 
- Rakes segment has revenue of 13,000 
- Hardware segment has revenue of 11,500 
- Accessories segment has revenue of 2,500 
- Shipping segment has revenue of 3,000 
The combined revenue is 38,000. 
The revenue of the Pails segment is less than 10% of the combined revenue, and the Accessories and Shipping segments are not reportable as they are not meeting the quantitative threshold. 
Thus, the Rakes, Pails, and Hardware segments are reportable under the revenue test as they have a combined revenue of 32,500 which is more than 10% of the total combined revenue.