Elektronix, Inc. has three operating segments with the following information: Which operating segments are separately reportable under the assets test?
A) DVDs only.
B) DVDs and MP3s.
C) DVDs and VCRs.
D) VCRs and MP3s.
E) DVDs, VCRs, and MP3s.

Question

Elektronix, Inc. has three operating segments with the following information:  Which operating segments are separately reportable under the assets test?
A) DVDs only. 
B) DVDs and MP3s. 
C) DVDs and VCRs. 
D) VCRs and MP3s. 
E) DVDs, VCRs, and MP3s.

Quizplus · Accepted Answer

According to the assets test, an operating segment is separately reportable if its assets are 10% or more of the combined assets of all operating segments. In this case, the assets of DVDs, VCRs, and MP3s are $1,500,000, $600,000, and $900,000, respectively. The combined assets of all operating segments are $3,000,000. The assets of DVDs, VCRs, and MP3s are 50%, 20%, and 30%, respectively, of the combined assets, which exceed the 10% threshold. Therefore, all three operating segments are separately reportable under the assets test.