Grum Corp.,a publicly-owned corporation,is subject to the requirements for segment reporting.In its income statement for the year ended December 31st,Grum reported consolidated revenues of $50,000,000,operating expenses of $47,000,000,and net income of $3,000,000.Operating expenses include payroll costs of $15,000,000.Grum's combined identifiable assets of all industry segments at December 31st,were $40,000,000.In its year-end financial statements,Grum would be most likely to disclose major customer data if sales to any single customer amounted to at least:
A) $1,500,000
B) $300,000
C) $5,000,000
D) $4,000,000

Question

Quizplus · Accepted Answer

According to the requirements for segment reporting, a company must disclose information about its major customers if sales to any single customer amount to 10% or more of consolidated revenues. In this case, 10% of Grum's consolidated revenues of $50,000,000 is $5,000,000. Therefore, Grum would be most likely to disclose major customer data if sales to any single customer amounted to at least $5,000,000. Choices A, B, and D are below this threshold.

Grum Corp,A Publicly-Owned Corporation,is Subject to the Requirements for Segment Reporting