Grum Corp., a publicly-owned corporation, is subject to the requirements for segment reporting. In its
income statement for the year ended December 31, 1991, Grum reported revenues of $50,000,000,
operating expenses of $47,000,000, and net income of $3,000,000. Operating expenses include payroll
costs of $ 15,000,000. Grum's combined identifiable assets of all industry segments at December 31,
1 991, were $40,000,000.
In its 1991 financial statements, Grum should disclose major customer data if sales to any single
customer amount to at least:
Mellow Co. depreciated a $12,000 asset over five years, using the straight-line method with no salvage
value. At the beginning of the fifth year, it was determined that the asset will last another four years. What
amount should Mellow report as depreciation expense for year 5?
An inventory loss from a market price decline occurred in the first quarter, and the decline was not
expected to reverse during the fiscal year. However, in the third quarter the inventory's market price
recovery exceeded the market decline that occurred in the first quarter. For interim financial reporting, the
dollar amount of net inventory should:
According to the FASB conceptual framework, the usefulness of providing information in financial
statements is subject to the constraint of:
On December 31, 20X2, the Board of Directors of Maxy Manufacturing, Inc. committed to a plan to
discontinue the operations of its Alpha division. Maxy estimated that Alpha's 20X3 operating loss would
be $500,000 and that the fair value of Alpha's facilities was $300,000 less than their carrying amounts.
The estimate for 20X3 turned out to be correct. Alpha's 20X2 operating loss was $1,400,000, and the
division was actually sold for $400,000 less than its carrying amount. Maxy's effective tax rate is 30%.
In its 20X3 income statement, what amount should Maxy report as loss from discontinued operations?
