Selected information from the adjusted trial balance of Warmers Inc. as of December 31, 20X1, follows: Department ADepartment BTotalMerchandise Inventory, January 1$47,000 $17,000 $64,000 Merchandise Inventory, December 31 43,000 11,200 54,200 Sales 578,900 248,100 827,000 Sales Returns and Allowances 5,789 2,481 8,270 Purchases 210,000 125,000 335,000 Freight In 520 520 1,040 Purchases Returns and Allowances 1,600 520 2,120 Sales Salaries Expense 102,000 52,000 154,000 Advertising Expense 15,200 5,200 20,400 Store Supplies Expense 680 22 702 Cash Short or Over 42 82 124 Insurance Expense 15,200 Rent Expense 38,000 Utilities Expense 6,200 Office Salaries Expense 42,000 Other Office Expense 1,500 Uncollectible Accounts Expense 5,200 Depreciation Expense—Furniture and Fixtures 6,200 Depreciation Expense—Office Equipment 520 Interest Income 320 Interest Expense 520 1. Insurance Expense: in proportion to the total of the furniture and fixtures (the gross assets before depreciation) and the ending inventory in the departments. These totals are as follows: Department A$154,000 Department B 66,000 Total$220,000 2. Rent Expense and Utilities Expense: on the basis of floor space occupied, as follows: Department A4,960square feet Department B1,240square feet Total6,200square feet 3. Office Salaries Expense, Other Office Expenses, and Depreciation Expense—Office Equipment: on the basis of the gross sales in each department.4. Uncollectible Accounts Expense: on the basis of net sales in each department.5. Depreciation Expense—Furniture and Fixtures: in proportion to cost of furniture and fixtures in each department. These costs are as follows. Department A$28,600 Department B 23,400 Total$52,000 Prepare a departmental income statement for the year ended December 31, 20X1. The bases for allocating indirect expensesare given above. (Note: Because allocations are not precise, round your calculation for allocation percent to the nearest wholepercent (two decimals). Also round your final answers to the nearest whole dollar.)WARMERS INC.Income StatementYear Ended December 31, 20X1Department A Department BTotalOperating revenues$Net sales$$Cost of goods soldDelivered cost of purchasesNet delivered cost of purchasesTotal merchandise available for sale$Cost of goods sold$$0 $Operating expenses Note: Round your calculation for allocation percent to the nearest whole percent (two decimals).Direct expensesTotal direct expenses0 $Indirect expensesTotal indirect expenses0 $Net income from operationsOther IncomeOther Expense%242424%24%24

The income statement estimates a company's net income by decreasing the total expenses from total…

Answered: Department A Department B Total…

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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Question

Selected information from the adjusted trial balance of Warmers Inc. as of December 31, 20X1, follows:

	Department A	Department B	Total
Merchandise Inventory, January 1	$	47,000		$	17,000	$	64,000
Merchandise Inventory, December 31		43,000			11,200		54,200
Sales		578,900			248,100		827,000
Sales Returns and Allowances		5,789			2,481		8,270
Purchases		210,000			125,000		335,000
Freight In		520			520		1,040
Purchases Returns and Allowances		1,600			520		2,120
Sales Salaries Expense		102,000			52,000		154,000
Advertising Expense		15,200			5,200		20,400
Store Supplies Expense		680			22		702
Cash Short or Over		42			82		124
Insurance Expense							15,200
Rent Expense							38,000
Utilities Expense							6,200
Office Salaries Expense							42,000
Other Office Expense							1,500
Uncollectible Accounts Expense							5,200
Depreciation Expense—Furniture and Fixtures							6,200
Depreciation Expense—Office Equipment							520
Interest Income							320
Interest Expense							520

1. Insurance Expense: in proportion to the total of the furniture and fixtures (the gross assets before depreciation) and the ending inventory in the departments. These totals are as follows:


Department A	$	154,000
Department B		66,000
Total	$	220,000

2. Rent Expense and Utilities Expense: on the basis of floor space occupied, as follows:


Department A	4,960	square feet
Department B	1,240	square feet
Total	6,200	square feet

3. Office Salaries Expense, Other Office Expenses, and Depreciation Expense—Office Equipment: on the basis of the gross sales in each department.

4. Uncollectible Accounts Expense: on the basis of net sales in each department.

5. Depreciation Expense—Furniture and Fixtures: in proportion to cost of furniture and fixtures in each department. These costs are as follows.


Department A	$	28,600
Department B		23,400
Total	$	52,000

Prepare a departmental income statement for the year ended December 31, 20X1. The bases for allocating indirect expenses
are given above. (Note: Because allocations are not precise, round your calculation for allocation percent to the nearest whole
percent (two decimals). Also round your final answers to the nearest whole dollar.)
WARMERS INC.
Income Statement
Year Ended December 31, 20X1
Department A Department B
Total
Operating revenues
$
Net sales
$
$
Cost of goods sold
Delivered cost of purchases
Net delivered cost of purchases
Total merchandise available for sale
$
Cost of goods sold
$
$
0 $
Operating expenses

Note: Round your calculation for allocation percent to the nearest whole percent (two decimals).
Direct expenses
Total direct expenses
0 $
Indirect expenses
Total indirect expenses
0 $
Net income from operations
Other Income
Other Expense
%24
24
24
%24
%24

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Department A Department B Total Merchandise Inventory, January 1 $ 47,000 $ 17,000 $ 64,000 Merchandise Inventory, December 31 43,000 11,200 54,200 Sales 578,900 248,100 827,000 Sales Returns and Allowances 5,789 2,481 8,270 Purchases