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
Selected information from the adjusted
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 | ||||||||
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F71b82b19-0193-4355-bffd-2f22bedfd372%2F97742ff3-988f-4dbe-9b37-44efea29d968%2Ffpmc358_processed.png&w=3840&q=75)
![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F71b82b19-0193-4355-bffd-2f22bedfd372%2F97742ff3-988f-4dbe-9b37-44efea29d968%2Ff9of7y_processed.png&w=3840&q=75)
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