Dragon Company Has Two Reportable Segments,A and B

question 5

Multiple Choice

Dragon Company has two reportable segments,A and B.Segment A made $3,000,000 of sales to external customers and $200,000 of sales to other operating segments.Segment B made sales of $5,000,000 to external customers and $1,200,000 of sales to other operating segments.Dragon Company reported $9,600,000 of revenues on its consolidated income statement.What calculation below correctly determines whether Dragon Company's reportable segments satisfy the 75% revenue test?

• A)$8,000,000/$9,600,000
• B)$8,000,000/$11,000,000
• C)$9,400,000/$9,600,000
• D)$9,400,000/$11,000,000

---

Definitions:

Internal Users

Internal users are individuals or groups within an organization who use financial information to make decisions about the operations of the company, such as management and employees.

External Users

Individuals or entities outside of a company who use its financial information, typically for analysis, investment, or regulatory purposes.

Sole Owner

An individual who exclusively owns a business, bearing all the risks and entitled to all the profits.

Personal Automobile

A privately owned vehicle used for personal transportation, not for business or commercial purposes.