Scenario 12-1
Ansfield, Inc -Refer to Scenario 12-1

question 15

Multiple Choice

Scenario 12-1
Ansfield, Inc. has several potentially reportable segments. The following financial information has been determined for the current fiscal year:
$\begin{array}{lr}\text { Consolidated net income } & \$ 1,000,000 \\\text { Operating income before taxes } & 1,500,000 \\\text { Net operating income of all segments } & 1,350,000 \\\text { Total consolidated revenue } & 8,000,000 \\\text { Total revenue of all segments, } & \\\text { excluding intersegments sales } & 7,000,000 \\\text { Total intersegment sales } & 1,200,000 \\\text { Consolidated total assets } & 50,000,000 \\\text { Total assets of all segments } & 45,000,000\end{array}$
-Refer to Scenario 12-1. For Ansfield, Inc. to report a significant portion of its financial information as segments, its segments, in total, must represent

• A) $37,500,000 in assets.
• B) $6,000,000 in revenues.
• C) $1,125,000 in operating income before taxes.
• D) The answer cannot be determined from the information given.

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Definitions:

Simplified Method

A straightforward calculation approach, often used for determining the taxable portion of annuity payments or retirement benefits.

Qualified Pension Plan

A retirement plan that meets requirements set forth by the IRS to qualify for favorable tax treatment.

Tax-Deferred

Tax-Deferred refers to investment earnings such as interest, dividends, or capital gains that accumulate tax-free until the investor takes constructive receipt of the gains.

Pension Plan Rules

Regulations and policies that govern how a pension plan operates, including eligibility, contributions, and benefits.