b. Correct the divisional income statements, using the activity bases provided in revising the service department charges. If an amount box does not require an entry, leave it blank, or enter "0". Do not round your interim calculations.WILD SUN AIRLINES INC.Divisional Income StatementsFor the Year Ended December 31, 20Y9Passenger DivisionCargo DivisionRevenues2,314,0002,314,000Operating expenses1,873,3002,082,600Income from operations before service department charges440,700231400Less service department charges:TrainingFlight schedulingReservationsIncome from operations Corrections to Service Department Charges for a Service CompanyWild Sun Airlines Inc. has two divisions organized as profit centers, the Passenger Division and the Cargo Division. The following divisional income statements were prepared:Wild Sun Airlines Inc.Divisional Income StatementsFor the Year Ended December 31, 20Y9Passenger DivisionCargo DivisionRevenues$2,314,000$2,314,000Operating expenses1,873,3002,082,600Income from operations before$440,700$231,400service department chargesLess service department charges:Training$108,800$108,800Flight scheduling80,85080,850Reservations108,000297,650108,000297,650Income from operations$143,050$(66,250)The service department charge rate for the service department costs was based on revenues. Because the revenues of the two divisions were the same, the service department charges to each division were also the same.The following additional information is available:PassengerCargoTotalDivisionDivisionNumber of personnel trained240100340Number of flights320450770Number of reservations requested14,40014,400a. Does the income from operations for the two divisions accurately measure performance? Explain.The reported income from operations does notaccurately measure performance because the service department charges are based on revenuesRevenues are notassociated with the profit center manager's use of the service department services.b. Correct the divisional income statements, using the activity bases provided in revising the service department charges. If an amount box does not require an entry, leave it blank, or enter "0". Do not round your interim calculations.WILD SUN AIRLINES INC.Divisional Income StatementsFor the Year Ended December 31, 20Y9Passenger DivisionCargo Division

Solution:- b)Correction of the divisional income statements, using the activity bases provided in…

b. Correct the divisional income statements, using the activity bases provided in revising the service department charges. If an amount box does not require an entry, leave it blank, or enter "0". Do not round your interim calculations. WILD SUN AIRLINES INC. Divisional Income Statements For the Year Ended December 31, 20Y9 Rassenger Division Cargo Divieion

b. Correct the divisional income statements, using the activity bases provided in revising the service department charges. If an amount box does not require an entry, leave it blank, or enter "0". Do not round your interim calculations. WILD SUN AIRLINES INC. Divisional Income Statements For the Year Ended December 31, 20Y9 Rassenger Division Cargo Divieion

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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Below are departmental income statements for a guitar manufacturer. The company classifies advertising, rent, and utilities as indirect expenses. The manufacturer is considering eliminating its Electric Guitar department because it shows a loss. Departmental Income Statements For Year Ended December 31 Sales Cost of goods sold Gross profit Expenses Advertising Depreciation-Equipment Salaries Supplies used Rent Utilities Total expenses Income (loss) Acoustic $ 101,600 44,875 56,725 5,045 10,110 19,500 1,980 7,005 3,025 46,665 $ 10,060 Electric $ 83,800 46,950 36,850 4,320 8,510 17,300 1,780 5,980 2,570 40,460 $ (3,610) 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated?
Cost of Materials Issuances Under the FIFO Method An incomplete subsidiary ledger of materials inventory for May is as follows: a. Complete the materials issuances and balances for the materials subsidiary ledger under FIFO Received Issued Materials Receiving Report Number Requisition Number 25 31 Received Quantity 210 d. Comparing 140 Received Unit Price $11 13 106 119 b. Determine the materials inventory balance at the end of May. Issued Quantity 340 200 Issued Amount 0 Balance Date May 1 May 4 May 10 May 21 May 27 Balance Quantity 300 000000-*** Balance c. Journalize the summary entry to transfer materials to work in process. If an amount box does not require an entry, leave it blank. price Balance 10000⁰0 Amount $2,700 es reported in the materials ledger with predetermined order points would enable management to order materials before (4) causes idle time
es N Required information [The following information applies to the questions displayed below.] The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense-Store Equipment, Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative. Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable Common stock Retained earnings Dividends NELSON COMPANY Unadjusted Trial Balance January 31 Sales. Sales discounts Sales returns and allowances Cost of goods sold Depreciation expense-Store equipment Sales salaries expense Office salaries expense Insurance expense Rent expense-Selling space Rent expense-Office space Store supplies expense Advertising expense…
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The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense-Store Equipment, Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative. Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable J. Nelson, Capital J. Nelson, Withdrawals Sales Sales discounts Sales returns and allowances Cost of goods sold Depreciation expense-Store equipment Sales salaries expense Office salaries expense Insurance expense Rent expense-Selling space Rent expense-Office space Store supplies expense Advertising expense Totals NELSON COMPANY Unadjusted Trial Balance January 31 Additional Information: X Answer is complete but not entirely correct. Current ratio…
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