Profit Center Responsibility ReportingXSport 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, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted:Sales—Winter Sports Division$29,295,000Sales—Summer Sports Division32,364,000Cost of Goods Sold—Winter Sports Division17,577,000Cost of Goods Sold—Summer Sports Division18,693,000Sales Expense—Winter Sports Division5,022,000Sales Expense—Summer Sports Division4,464,000Administrative Expense—Winter Sports Division2,929,500Administrative Expense—Summer Sports Division2,873,700Advertising Expense1,012,000Transportation Expense435,000Accounts Receivable Collection Expense250,200Warehouse Expense2,790,000The 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, $475,000; Summer Sports Division, $537,000.Transportation expense—charged back to divisions at a charge rate of $15 per bill of lading: Winter Sports Division, 13,800 bills of lading; Summer Sports Division, 15,200 bills of lading.Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $9 per invoice: Winter Sports Division, 12,800 sales invoices; Summer Sports Division, 15,000 sales invoices.Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 160,000 square feet; Summer Sports Division, 200,000 square feet.Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.XSport Sporting Goods Co.Divisional Income StatementsFor the Year Ended December 31, 20Y9 Winter Sports DivisionSummer Sports DivisionSales$fill in the blank 96a60804c046003_1$fill in the blank 96a60804c046003_2Cost of goods soldfill in the blank 96a60804c046003_3fill in the blank 96a60804c046003_4Gross profit$fill in the blank 96a60804c046003_5$fill in the blank 96a60804c046003_6Divisional selling and administrative expenses: Divisional selling expenses$fill in the blank 96a60804c046003_7$fill in the blank 96a60804c046003_8Divisional administrative expensesfill in the blank 96a60804c046003_9fill in the blank 96a60804c046003_10Total divisional selling and administrative expenses$fill in the blank 96a60804c046003_11$fill in the blank 96a60804c046003_12Income from operations before service department charges$fill in the blank 96a60804c046003_13$fill in the blank 96a60804c046003_14Service department charges: Advertising expense$fill in the blank 96a60804c046003_15$fill in the blank 96a60804c046003_16Transportation expensefill in the blank 96a60804c046003_17fill in the blank 96a60804c046003_18Accounts receivable collection expensefill in the blank 96a60804c046003_19fill in the blank 96a60804c046003_20Warehouse expensefill in the blank 96a60804c046003_21fill in the blank 96a60804c046003_22Total service department charges$fill in the blank 96a60804c046003_23$fill in the blank 96a60804c046003_24Income from operations$fill in the blank 96a60804c046003_25$fill in the blank 96a60804c046003_26 FeedbackProvide supporting schedules for determining service department charges. If required, round per unit amounts to two decimal places and final answers to the nearest dollar.XSport Sporting Goods Co.Service Department ChargesFor the Year Ended December 31, 20Y9 Winter Sports DivisionSummer Sports DivisionTotalAdvertising expense$fill in the blank c76291fe2fa4f81_1$fill in the blank c76291fe2fa4f81_2$fill in the blank c76291fe2fa4f81_3Transportation rate per bill of lading$fill in the blank c76291fe2fa4f81_4$fill in the blank c76291fe2fa4f81_5 Number of bills of ladingfill in the blank c76291fe2fa4f81_6fill in the blank c76291fe2fa4f81_7 Transportation expense$fill in the blank c76291fe2fa4f81_8$fill in the blank c76291fe2fa4f81_9$fill in the blank c76291fe2fa4f81_10Accounts receivable collection rate$fill in the blank c76291fe2fa4f81_11$fill in the blank c76291fe2fa4f81_12 Number of sales invoicesfill in the blank c76291fe2fa4f81_13fill in the blank c76291fe2fa4f81_14 Accounts receivable collection expense$fill in the blank c76291fe2fa4f81_15$fill in the blank c76291fe2fa4f81_16$fill in the blank c76291fe2fa4f81_17Warehouse rate per sq. ft.$fill in the blank c76291fe2fa4f81_18$fill in the blank c76291fe2fa4f81_19 Number of square feetfill in the blank c76291fe2fa4f81_20fill in the blank c76291fe2fa4f81_21 Warehouse expense$fill in the blank c76291fe2fa4f81_22$fill in the blank c76291fe2fa4f81_23$fill in the blank c76291fe2fa4f81_24

Income statement: The financial statement which reports revenues and expenses from business…

Answered: Prepare a divisional income statement…

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

Profit Center Responsibility Reporting

XSport 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, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted:

Sales—Winter Sports Division	$29,295,000
Sales—Summer Sports Division	32,364,000
Cost of Goods Sold—Winter Sports Division	17,577,000
Cost of Goods Sold—Summer Sports Division	18,693,000
Sales Expense—Winter Sports Division	5,022,000
Sales Expense—Summer Sports Division	4,464,000
Administrative Expense—Winter Sports Division	2,929,500
Administrative Expense—Summer Sports Division	2,873,700
Advertising Expense	1,012,000
Transportation Expense	435,000
Accounts Receivable Collection Expense	250,200
Warehouse Expense	2,790,000

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, $475,000; Summer Sports Division, $537,000.
Transportation expense—charged back to divisions at a charge rate of $15 per bill of lading: Winter Sports Division, 13,800 bills of lading; Summer Sports Division, 15,200 bills of lading.
Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $9 per invoice: Winter Sports Division, 12,800 sales invoices; Summer Sports Division, 15,000 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.

XSport Sporting Goods Co.
Divisional Income Statements
For the Year Ended December 31, 20Y9
	Winter Sports Division	Summer Sports Division
Sales	$fill in the blank 96a60804c046003_1	$fill in the blank 96a60804c046003_2
Cost of goods sold	fill in the blank 96a60804c046003_3	fill in the blank 96a60804c046003_4
Gross profit	$fill in the blank 96a60804c046003_5	$fill in the blank 96a60804c046003_6
Divisional selling and administrative expenses:
Divisional selling expenses	$fill in the blank 96a60804c046003_7	$fill in the blank 96a60804c046003_8
Divisional administrative expenses	fill in the blank 96a60804c046003_9	fill in the blank 96a60804c046003_10
Total divisional selling and administrative expenses	$fill in the blank 96a60804c046003_11	$fill in the blank 96a60804c046003_12
Income from operations before service department charges	$fill in the blank 96a60804c046003_13	$fill in the blank 96a60804c046003_14
Service department charges:
Advertising expense	$fill in the blank 96a60804c046003_15	$fill in the blank 96a60804c046003_16
Transportation expense	fill in the blank 96a60804c046003_17	fill in the blank 96a60804c046003_18
Accounts receivable collection expense	fill in the blank 96a60804c046003_19	fill in the blank 96a60804c046003_20
Warehouse expense	fill in the blank 96a60804c046003_21	fill in the blank 96a60804c046003_22
Total service department charges	$fill in the blank 96a60804c046003_23	$fill in the blank 96a60804c046003_24
Income from operations	$fill in the blank 96a60804c046003_25	$fill in the blank 96a60804c046003_26

Feedback

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.

XSport Sporting Goods Co.
Service Department Charges
For the Year Ended December 31, 20Y9
	Winter Sports Division	Summer Sports Division	Total
Advertising expense	$fill in the blank c76291fe2fa4f81_1	$fill in the blank c76291fe2fa4f81_2	$fill in the blank c76291fe2fa4f81_3
Transportation rate per bill of lading	$fill in the blank c76291fe2fa4f81_4	$fill in the blank c76291fe2fa4f81_5
Number of bills of lading	fill in the blank c76291fe2fa4f81_6	fill in the blank c76291fe2fa4f81_7
Transportation expense	$fill in the blank c76291fe2fa4f81_8	$fill in the blank c76291fe2fa4f81_9	$fill in the blank c76291fe2fa4f81_10
Accounts receivable collection rate	$fill in the blank c76291fe2fa4f81_11	$fill in the blank c76291fe2fa4f81_12
Number of sales invoices	fill in the blank c76291fe2fa4f81_13	fill in the blank c76291fe2fa4f81_14
Accounts receivable collection expense	$fill in the blank c76291fe2fa4f81_15	$fill in the blank c76291fe2fa4f81_16	$fill in the blank c76291fe2fa4f81_17
Warehouse rate per sq. ft.	$fill in the blank c76291fe2fa4f81_18	$fill in the blank c76291fe2fa4f81_19
Number of square feet	fill in the blank c76291fe2fa4f81_20	fill in the blank c76291fe2fa4f81_21
Warehouse expense	$fill in the blank c76291fe2fa4f81_22	$fill in the blank c76291fe2fa4f81_23	$fill in the blank c76291fe2fa4f81_24

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