Sumo Pty Ltd makes submarines for coastal holiday resorts.The small submarines hold around ten passengers and one driver and are used for diving up to ten metres to examine reefs and sea life.Sumo Pty Ltd exports the submarines around the world and last years total revenue was $45 million.This year, revenue is expected to be $80 million with about 70% export revenue.Sumo Pty Ltd is owned jointly by two brothers Harry and Barry Jones.They employ 85 full time staff from their single factory outside Noosa on the Sunshine Coast of Queensland.Sumo Pty Ltd is likely to be a:
A)non-reporting entity because there is little separation of ownership from management
B)reporting entity because of its financial and economic importance
C)non-reporting entity because of its lack of political importance
D)reporting entity because of its large percentage of export revenue to total revenue

Question

Quizplus · Accepted Answer

Sumo Pty Ltd is a reporting entity because of its significant financial and economic importance, with total revenue expected to be $80 million this year, and with 70% of that revenue coming from exports. The fact that it is owned by two brothers does not necessarily mean that it is a non-reporting entity.

Sumo Pty Ltd Makes Submarines for Coastal Holiday Resorts