Falconhead Supply Had Three Operating Segments During 2010 In Addition, Falconhead Has Incurred $100, 000 of Common Expenses

question 22

Essay

Falconhead Supply had three operating segments during 2010.In determining whether these segments are considered reportable segments, Falconhead has gathered the following information:
$\begin{array}{llll}&\text { Segment }\\& \underline{\text {A}}& \underline{\text {B}}& \underline{\text {C}}\\\text { Revenues } & \$ 60,000 & \$ 80,000 & \$ 160,000 \\\text { Expenses } & 30,000 & 50,000 & 85,000 \\\text { Assets } & 200,000 & 180,000 & 420,000\end{array}$ In addition, Falconhead has incurred $100, 000 of common expenses that can be reasonably allocated to the three segments.Since most of the common costs relate to the physical operating capability of Falconhead, a reasonable allocation method is to allocate the common costs to each segment based on the ratio of a segment's assets to total assets of the three segments.
Required:
Compute the profit (loss)for each operating segment under current GAAP provisions.

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Definitions:

Geographical Adjustments

modifications made to policies, wages, or prices to reflect the cost of living or market conditions in different locations.

Warehouse Inventory

The stock of goods and materials held by a company in a warehouse for processing or distribution.

Transportation Costs

Expenses associated with moving goods or individuals from one location to another, including fuel, labor, and vehicle maintenance.

Promotional Allowance

A discount or financial incentive provided to retailers or wholesalers to encourage the promotion and sale of a product.