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2. The following is a partiall. Cozy Bookstore. It reports departments. Allocate the to the three operating depa Allocation Base

2. The following is a partiall. Cozy Bookstore. It reports departments. Allocate the to the three operating depa Allocation Base

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2. The following is a partially completed lower section of a departmental expense allocation for Cozy Bookstore. It reports the total amounts of direct and indirect expenses allocated to its five departments. Allocate the expenses of the two service departments (advertising and purchasing) to the three operating departments and provide the complete income statement. Allocatlon of Expenses to Departments Еxpense Account Bal. Advertising Dept. Purchasing Dept. Books Magazines Dept. Newspapers Dept. Allocation Base Dept. $698,000 $24,000 $34,000 $425,000 $90,000 $125,000 Total department expenses.. Service department expenses Advertising department. Purchasing department. Total expenses allocated to operating departments.. Sales ? .Purch, orders Advertising and purchasing department expenses are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. Department Sales Purchase Orders Books ... $495,000 516 Magazines.... 198,000 360 Newspapers 207,000 324 Total..... $900,000 1,200
Transcribed Image Text:2. The following is a partially completed lower section of a departmental expense allocation for Cozy Bookstore. It reports the total amounts of direct and indirect expenses allocated to its five departments. Allocate the expenses of the two service departments (advertising and purchasing) to the three operating departments and provide the complete income statement. Allocatlon of Expenses to Departments Еxpense Account Bal. Advertising Dept. Purchasing Dept. Books Magazines Dept. Newspapers Dept. Allocation Base Dept. $698,000 $24,000 $34,000 $425,000 $90,000 $125,000 Total department expenses.. Service department expenses Advertising department. Purchasing department. Total expenses allocated to operating departments.. Sales ? .Purch, orders Advertising and purchasing department expenses are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. Department Sales Purchase Orders Books ... $495,000 516 Magazines.... 198,000 360 Newspapers 207,000 324 Total..... $900,000 1,200
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