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Championship Sports Inc. operates two divisions-the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, afte all adjustments, including those for inventories, were recorded and posted: Sales-Winter Sports Division Sales-Summer Sports Division Cost of Goods Sold-Winter Sports Division Cost of Goods Sold-Summer Sports Division Sales Expense-Winter Sports Division Sales Expense-Summer Sports Division Administrative Expense-Winter Sports Division Administrative Expense-Summer Sports Division Advertising Expense Transportation Expense $23,520,000 25,984,000 14,112,000 15,008,000 4,032,000 3,584,000 2,352,000 2,307,200 1,065,000 466,500 269,100 2,240,000 Accounts Receivable Collection Expense Warehouse Expense The bases to be used in allocating expenses, together with other information, are as follows:

Championship Sports Inc. operates two divisions-the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, afte all adjustments, including those for inventories, were recorded and posted: Sales-Winter Sports Division Sales-Summer Sports Division Cost of Goods Sold-Winter Sports Division Cost of Goods Sold-Summer Sports Division Sales Expense-Winter Sports Division Sales Expense-Summer Sports Division Administrative Expense-Winter Sports Division Administrative Expense-Summer Sports Division Advertising Expense Transportation Expense $23,520,000 25,984,000 14,112,000 15,008,000 4,032,000 3,584,000 2,352,000 2,307,200 1,065,000 466,500 269,100 2,240,000 Accounts Receivable Collection Expense Warehouse Expense The bases to be used in allocating expenses, together with other information, are as follows:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Profit center responsibility reporting Championship Sports Inc. operates two divisions-the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales-Winter Sports Division Sales-Summer Sports Division Cost of Goods Sold-Winter Sports Division Cost of Goods Sold-Summer Sports Division Sales Expense-Winter Sports Division Sales Expense-Summer Sports Division Administrative Expense-Winter Sports Division Administrative Expense-Summer Sports Division Advertising Expense Transportation Expense Accounts Receivable Collection Expense Warehouse Expense Line Item Description $23,520,000 25,984,000 14,112,000 15,008,000 4,032,000 3,584,000 2,352,000 The bases to be used in allocating expenses, together with other information, are as follows: a. Advertising expense-incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $500,000; Summer Sports Division, $565,000. b. Transportation expense-allocated to divisions at a rate of $15 per bill of lading: Winter Sports Division, 14,800 bills of lading; Summer Sports Division, 16,300 bills of lading. c. Accounts receivable collection expense-incurred at headquarters, allocated to divisions at a rate of $9 per invoice: Winter Sports Division, 13,800 sales invoices; Summer Sports Division, 16,100 sales invoices. d. Warehouse expense-allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 120,000 square feet; Summer Sports Division, 160,000 square feet. Sales Cost of goods sold Gross profit Divisional selling and administrative expenses: Divisional selling expenses Divisional administrative expenses Total divisional selling and administrative expenses Operating income before support department allocations Support department allocations: 2,307,200 1,065,000 Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations. Championship Sports Inc. Divisional Income Statements For the Year Ended December 31, 20Y9 Advertising expense Transportation expense 466,500 269,100 2,240,000 Winter Sports Summer Sports Division Division 000 0000 00 0 10000 1000
Transcribed Image Text:Profit center responsibility reporting Championship Sports Inc. operates two divisions-the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales-Winter Sports Division Sales-Summer Sports Division Cost of Goods Sold-Winter Sports Division Cost of Goods Sold-Summer Sports Division Sales Expense-Winter Sports Division Sales Expense-Summer Sports Division Administrative Expense-Winter Sports Division Administrative Expense-Summer Sports Division Advertising Expense Transportation Expense Accounts Receivable Collection Expense Warehouse Expense Line Item Description $23,520,000 25,984,000 14,112,000 15,008,000 4,032,000 3,584,000 2,352,000 The bases to be used in allocating expenses, together with other information, are as follows: a. Advertising expense-incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $500,000; Summer Sports Division, $565,000. b. Transportation expense-allocated to divisions at a rate of $15 per bill of lading: Winter Sports Division, 14,800 bills of lading; Summer Sports Division, 16,300 bills of lading. c. Accounts receivable collection expense-incurred at headquarters, allocated to divisions at a rate of $9 per invoice: Winter Sports Division, 13,800 sales invoices; Summer Sports Division, 16,100 sales invoices. d. Warehouse expense-allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 120,000 square feet; Summer Sports Division, 160,000 square feet. Sales Cost of goods sold Gross profit Divisional selling and administrative expenses: Divisional selling expenses Divisional administrative expenses Total divisional selling and administrative expenses Operating income before support department allocations Support department allocations: 2,307,200 1,065,000 Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations. Championship Sports Inc. Divisional Income Statements For the Year Ended December 31, 20Y9 Advertising expense Transportation expense 466,500 269,100 2,240,000 Winter Sports Summer Sports Division Division 000 0000 00 0 10000 1000
Transportation expense Accounts receivable collection expense Warehouse expense Total support department allocations Operating income Feedback >Check My Work Provide supporting computations for support department allocations. If required, round per unit amounts to two decimal places and final answers to the nearest dollar. Championship Sports Inc. Support Department Allocations For the Year Ended December 31, 20Y9 Line Item Description Advertising expense Transportation rate per bill of lading Number of bills of lading Transportation expense Accounts receivable collection rate Number of sales invoices Accounts receivable collection expense Warehouse rate per sq. ft. Number of square feet Warehouse expense Winter Sports Summer Sports Division Division 100000 Total
Transcribed Image Text:Transportation expense Accounts receivable collection expense Warehouse expense Total support department allocations Operating income Feedback >Check My Work Provide supporting computations for support department allocations. If required, round per unit amounts to two decimal places and final answers to the nearest dollar. Championship Sports Inc. Support Department Allocations For the Year Ended December 31, 20Y9 Line Item Description Advertising expense Transportation rate per bill of lading Number of bills of lading Transportation expense Accounts receivable collection rate Number of sales invoices Accounts receivable collection expense Warehouse rate per sq. ft. Number of square feet Warehouse expense Winter Sports Summer Sports Division Division 100000 Total
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