Crisfield Company Has Two Reportable Segments,C and D Segment C

question 48

Multiple Choice

Crisfield Company has two reportable segments,C and D Segment C made $4,000,000 of sales to external customers and $400,000 of sales to other operating segments. Segment D, on the other hand, made sales of $8,000,000 to external customers and $1,600,000 of sales to other operating segments. Crisfield Company reported $13,200,000 of revenues on its consolidated income statement. What calculation below correctly determines whether Crisfield Company's reportable segments satisfy the 75% revenue test?

• A) $14,000,000/$15,200,000
• B) $14,000,000/$13,200,000
• C) $12,000,000/$13,200,000
• D) $12,000,000/$15,200,000

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Definitions:

Proxy Solicitation

The process of gathering votes from shareholders to vote on corporate matters when they cannot attend the shareholder meeting in person.

Tender Offer

An offer made by an investor or acquiring company to purchase shares from the shareholders of a company at a specific price for a certain period.

Sale of Stock

This refers to the process of selling shares of a company to investors; this can be done via public offerings or through private sales.

Tax Avoidance

Tax avoidance involves legally exploiting the tax system to reduce tax liabilities, such as through deductions and credits, as opposed to tax evasion, which is illegal.