Problem:
Slatter Corp operates primarily in the United States. However, a few years ago, it opened a plan in Spain to produce merchandise to sell there. This foreign operation has been so successful that during the past 24 months the company started a manufacturing plant in Italy and another in Greece. Financial information for each of these facilities follows:
Spain Italy Greece
Sales..........................$395,000 $272,000 $463,000
Intersegment transfers......... 0 0 62,000
Operating expenses..............172,000 206,000 190,000
Interest expense................ 16,000 29,000 19,000
Income taxes.................... 67,000 19,000 34,000
Long-lived assets...............191,000 106,000 72,000
The company's domestic (US) operations reported the following information for the current year:
Sales to unaffiliated customers.............$4,610,000
Intersegment transfers.........................427,000
Operating expenses...........................2,410,000
Interest expense...............................136,000
Income taxes...................................819,000
Long-lived assets.............................1,894,000
Slatter has adopted the following criteria for determining the materiality of an individual foreign country: (1) sales to unaffiliated customers within a country are 10 percent or more of consolidated sales or (2) long-lived assets within a country are 10 percent or more of consolidated long-lived assets.
Apply Slatter's materiality tests to identify the countries to report seperately.