I need help with this: Elgin Flooring Company sells floor coverings through two departments, carpeting and hard covering (tile and linoleum). Operating information for 29019 appears below: Carpeting Dept Hard Covering Dept Inventory, January 1, 2019 $60,000 $26,000 Inventory, Dec 31, 2019 50,000 30,000 Net sales 500,000 800,000 Purchases 300,000 560,000 Purchases returns 28,000 8,000 Purchases discounts 16,000 4,000 Transportation in 18,000 14,000 Traceable department expenses 108,000 56,000 Common operating expenses of the firm were $225,000 Required a) Prepare a departmental income statement showing departmental contribution to common expenses and net income of the firm. Assume an over effective income tax rate of 20%. Elgin uses a periodic inventory system. b) Calculate the gross profit percentage for each department. c) If the common expenses were allocated 40% to the carpeting department and 60% to the hard covering department, what would the net income be for each department?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
I need help with this:
Elgin Flooring Company sells floor coverings through two departments, carpeting and hard covering (tile and linoleum). Operating information for 29019 appears below:
| Carpeting Dept | Hard Covering Dept | |
| Inventory, January 1, 2019 | $60,000 | $26,000 |
| Inventory, Dec 31, 2019 | 50,000 | 30,000 |
| Net sales | 500,000 | 800,000 |
| Purchases | 300,000 | 560,000 |
| Purchases returns | 28,000 | 8,000 |
| Purchases discounts | 16,000 | 4,000 |
| Transportation in | 18,000 | 14,000 |
| Traceable department expenses | 108,000 | 56,000 |
Common operating expenses of the firm were $225,000
Required
a) Prepare a departmental income statement showing departmental contribution to common expenses and net income of the firm. Assume an over effective income tax rate of 20%. Elgin uses a periodic inventory system.
b) Calculate the gross profit percentage for each department.
c) If the common expenses were allocated 40% to the carpeting department and 60% to the hard covering department, what would the net income be for each department?
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