Using only the Profit test, which of the following segment(s) would be reportable?
A) A
B) B
C) C
D)C and D

Question

Quizplus · Accepted Answer

The Profit test requires that the segment's operating profit or loss is 10% or more of the combined operating profit of all segments. 
In segment C, the operating profit is $20,000 which is 20% of the combined operating profit of all segments ($100,000), meeting the 10% threshold. 
In segment D, the operating loss is -$10,000 which is also 20% of the combined operating profit of all segments ($50,000), meeting the 10% threshold. Therefore, segments C and D are reportable.

Using Only the Profit Test, Which of the Following Segment(s)