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PTU Limited has 6 segments — P, Q, R, S, T & U. External sales total ₹250 lakh, Internal sales ₹50 lakh, Profit ₹46 lakh, Total Assets ₹350 lakh. Which would be the Reportable Segment on the basis of the Profitability Test under AS 17?
AP, Q, S & T
BP, Q & T
CP & T
DP & Q
Answer & Solution
Correct answer: C. P & T
1. Step 1: Profitability test threshold = 10% of the greater of combined profits of profitable segments or combined losses of loss-making segments.
2. Step 2: Profitable: P 22, Q 4, S 3, T 20, U 1 = 50. Loss: R (4). Threshold = 10% of 50 = ₹5 lakh.
3. Step 3: Segments with absolute profit/loss ≥ ₹5 lakh: P (22), T (20). Hence reportable: P & T.
_Source: ICAI BoS CA Inter Paper 1 Practice MCQ Paper (89270bos-aps3012-int-p1), Q.2_