Need a breakdown of how the answer was determined.
5. Faru Company identified five industry segments: (1) plastics, (2) metals, (3) lumber, (4) paper, and (5) finance. The company properly consolidated the segments when it prepared its annual financial statements. Information describing each segment is presented below (in thousands):
Plastics
Sales to outside parties: $8,215
Intersegment revenues transfers: 138
Interest income from outside parties: 0
Interest income from intersegment loans: 0
Operating expenses: 5,088
Interest expense: 79
Tangible assets: 1,678
Intangible assets: 94
Metals
Sales to outside parties: $2,787
Intersegment revenues transfers: 170
Interest income from outside parties: 25
Interest income from intersegment loans: 0
Operating expenses: 2,096
Interest expense: 21
Tangible assets: 3,882
Intangible assets: 469
Lumber
Sales to outside parties: $827
Intersegment revenues transfers: 125
Interest income from outside parties: 8
Interest income from intersegment loans: 0
Operating expenses: 1,191
Interest expense: 66
Tangible assets: 408
Intangible assets: 0
Paper
Sales to outside parties: $451
Intersegment revenues transfers: 140
Interest income from outside parties: 0
Interest income from intersegment loans: 0
Operating expenses: 753
Interest expense: 40
Tangible assets: 729
Intangible assets: 62
Finance
Sales to outside parties: $0
Intersegment revenues transfers: 0
Interest income from outside parties: 242
Interest income from intersegment loans: 207
Operating expenses: 21
Interest expense: 113
Tangible assets: 135
Intangible assets: 863
Required:
Prepare the profit or loss test and determine which of these segments was separately reportable. Revenues include sales to outside parties, intersegment revenues transfers, and interest income. Expenses include operating expenses and interest expense.
Profit or Loss Test (numbers in thousands)
Segment: Plastics
Revenues: $8,353
Expenses: $(5,167)
Profit: $3,186
Reportable
Segment: Metals
Revenues: $2,982
Expenses: $(2,117)
Profit: $865
Reportable
Segment: Lumber
Revenues: $960
Expenses: $(1,257)
Profit: $297
Segment: Paper
Revenues: $591
Expenses: $(793)
Loss: $(202)
Segment: Finance
Revenues: $449
Expenses: $(134)
Profit: $315
Total
Revenues: $13,335
Expenses: $(9,468)
Profit: $4,366
Loss: $499