V. Coverage
12. Debt to assets
ratio
13. Times interest
earne
14. Cash debt coverage
15. Book value
per share
Problem # 3 Segment reporting.
Finney Company's condensed income statement is presented below:
Revenues
Expenses
Cost of goods sold
Operating and administrative expenses
Depreciation expense
Income before taxes
Income tax expenses
Net income
Earnings per share (100,000 shares)
The following data is compiled relative to Finney's operating segments:
Revenues
Cost of goods sold
Operating and administrative expense
Depreciation expense
Included in the amounts allocated to each segment on the above percentages are the following
expenses which relate to general corporate activities:
Operating Segment
Hotels
Grains
Candy
Totals
Operating and administrative expense
$12,000
$9,000
$3,000
$24,000
Depreciation expense
3,500
4,000
2,500
10,000
Instructions
(a) Prepare a schedule showing the amounts distributed to each segment. (data was
calculated for you \rightarrow Given)
(b) Based only on the above information, which segments must be reported and why?
Total liabilities
Total assets
Income before income taxes
and interest expense
Interest expense
Net cash provided by
operating activities
Average total liabilities
Common stockholders' equity
Outstanding shares
Chapter 14, p. 787
Chapter 14, p. 787
Chapter 5, p. 234
Chapter 15. p. 850
$900,000
$400,000
200,000
40,000
640,000
260,000
78,000
$182,000
$1.82
Percent Identified with Segment
Hotels
Grains
Candy
42%
50%
8%
48
49
3
35
50
15
46
42
12
