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Assignment-Financial Statement presentation Finney Company’s condensed income statement is presented below: Revenues

Assignment-Financial Statement presentation

Finney Company’s condensed income statement is presented below:

Revenues €1,000,000

Expenses

Cost of goods sold €400,000

Operating and administrative expenses 200,000

Depreciation expense 40,000 640,000

Income before taxes 360,000

Income tax expenses 108,000

Net income € 252,000

Earnings per share (100,000 shares) €2.52

The following data is compiled relative to Finney’s operating segments:

Percent Identified with Segment

Hotels Grains Candy

Revenues 42% 50% 8%

Cost of goods sold 48 49 3

Operating and administrative expense 35 50 15

Depreciation expense 46 42 12

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) Compute operating profit for each segment.

(b) Based only on the above information, which segments must be reported and why?

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