Glades Sporting Goods Co. 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, 20Y8, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales—Winter Sports Division $33,075,000 Sales—Summer Sports Division 36,540,000 Cost of Goods Sold—Winter Sports Division 19,845,000 Cost of Goods Sold—Summer Sports Division 21,105,000 Sales Expense—Winter Sports Division 5,670,000 Sales Expense—Summer Sports Division 5,040,000 Administrative Expense—Winter Sports Division 3,307,500 Administrative Expense—Summer Sports Division 3,244,500 Advertising Expense 1,025,000 Transportation Expense 411,600 Accounts Receivable Collection Expense 197,400 Warehouse Expense 3,150,000 The bases to be used in allocating expenses, together with other essential information, are as follows: Advertising expense—incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $481,000; Summer Sports Division, $544,000. Transportation expense—charged back to divisions at a charge rate of $14 per bill of lading: Winter Sports Division, 14,000 bills of lading; Summer Sports Division, 15,400 bills of lading. Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $7 per invoice: Winter Sports Division, 13,000 sales invoices; Summer Sports Division, 15,200 sales invoices. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 160,000 square feet; Summer Sports Division, 200,000 square feet. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations. Glades Sporting Goods Co. Divisional Income Statements For the Year Ended December 31, 20Y8 Winter Sports Division Summer Sports Division Sales $ $ Cost of goods sold Gross profit $ $ Divisional selling and administrative expenses: Divisional selling expenses $ $ Divisional administrative expenses Total divisional selling and administrative expenses $ $ Income from operations before service department charges $ $ Service department charges: Advertising expense $ $ Transportation expense Accounts receivable collection expense Warehouse expense Total service department charges $ $ Income from operations $ $ Provide supporting schedules for determining service department charges. If required, round per unit amounts to two decimal places and final answers to the nearest dollar. Glades Sporting Goods Co. Service Department Charges For the Year Ended December 31, 20Y8 Winter Sports Division Summer Sports Division Total 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 $ $ $

Glades Sporting Goods Co. 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, 20Y8, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales—Winter Sports Division $33,075,000 Sales—Summer Sports Division 36,540,000 Cost of Goods Sold—Winter Sports Division 19,845,000 Cost of Goods Sold—Summer Sports Division 21,105,000 Sales Expense—Winter Sports Division 5,670,000 Sales Expense—Summer Sports Division 5,040,000 Administrative Expense—Winter Sports Division 3,307,500 Administrative Expense—Summer Sports Division 3,244,500 Advertising Expense 1,025,000 Transportation Expense 411,600 Accounts Receivable Collection Expense 197,400 Warehouse Expense 3,150,000 The bases to be used in allocating expenses, together with other essential information, are as follows: Advertising expense—incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $481,000; Summer Sports Division, $544,000. Transportation expense—charged back to divisions at a charge rate of $14 per bill of lading: Winter Sports Division, 14,000 bills of lading; Summer Sports Division, 15,400 bills of lading. Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $7 per invoice: Winter Sports Division, 13,000 sales invoices; Summer Sports Division, 15,200 sales invoices. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 160,000 square feet; Summer Sports Division, 200,000 square feet. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations. Glades Sporting Goods Co. Divisional Income Statements For the Year Ended December 31, 20Y8 Winter Sports Division Summer Sports Division Sales $ $ Cost of goods sold Gross profit $ $ Divisional selling and administrative expenses: Divisional selling expenses $ $ Divisional administrative expenses Total divisional selling and administrative expenses $ $ Income from operations before service department charges $ $ Service department charges: Advertising expense $ $ Transportation expense Accounts receivable collection expense Warehouse expense Total service department charges $ $ Income from operations $ $ Provide supporting schedules for determining service department charges. If required, round per unit amounts to two decimal places and final answers to the nearest dollar. Glades Sporting Goods Co. Service Department Charges For the Year Ended December 31, 20Y8 Winter Sports Division Summer Sports Division Total 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 $ $ $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Sales—Winter Sports Division	$33,075,000
Sales—Summer Sports Division	36,540,000
Cost of Goods Sold—Winter Sports Division	19,845,000
Cost of Goods Sold—Summer Sports Division	21,105,000
Sales Expense—Winter Sports Division	5,670,000
Sales Expense—Summer Sports Division	5,040,000
Administrative Expense—Winter Sports Division	3,307,500
Administrative Expense—Summer Sports Division	3,244,500
Advertising Expense	1,025,000
Transportation Expense	411,600
Accounts Receivable Collection Expense	197,400
Warehouse Expense	3,150,000

The bases to be used in allocating expenses, together with other essential information, are as follows:

Advertising expense—incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $481,000; Summer Sports Division, $544,000.
Transportation expense—charged back to divisions at a charge rate of $14 per bill of lading: Winter Sports Division, 14,000 bills of lading; Summer Sports Division, 15,400 bills of lading.
Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $7 per invoice: Winter Sports Division, 13,000 sales invoices; Summer Sports Division, 15,200 sales invoices.
Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 160,000 square feet; Summer Sports Division, 200,000 square feet.

Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.

Glades Sporting Goods Co.
Divisional Income Statements
For the Year Ended December 31, 20Y8
	Winter Sports Division	Summer Sports Division
Sales	$	$
Cost of goods sold
Gross profit	$	$
Divisional selling and administrative expenses:
Divisional selling expenses	$	$
Divisional administrative expenses
Total divisional selling and administrative expenses	$	$
Income from operations before service department charges	$	$
Service department charges:
Advertising expense	$	$
Transportation expense
Accounts receivable collection expense
Warehouse expense
Total service department charges	$	$
Income from operations	$	$

Provide supporting schedules for determining service department charges. If required, round per unit amounts to two decimal places and final answers to the nearest dollar.

Glades Sporting Goods Co.
Service Department Charges
For the Year Ended December 31, 20Y8
	Winter Sports Division	Summer Sports Division	Total
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	$	$	$

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 5 steps with 7 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.