Homework Help is Here – Start Your Trial Now!
Business
Business Law
Prepare a segmented income statement based on the following information: Accurate Accounting Services has the following information: Tax Total Firm Department Billings Less: Variable expenses $ $ Contribution margin $ Fixed expenses Net income $ $ 1,000,000 $ 425,000 $ 575,000 $ 580,000 $ (5,000) $ Audit Department 500,000 $ 200,000 $ 300,000 $ 290,000 $ 10,000 $ Consulting Department 400,000 $ 100,000 170,000 $ 55,000 230,000 $ 45,000 225,000 $ 5,000 $ 65,000 (20,000) Based on the profitability of the Consulting Department, the company has decided to close the Consulting Department. Of the total fixed expenses, the following are the costs that won't

Prepare a segmented income statement based on the following information: Accurate Accounting Services has the following information: Tax Total Firm Department Billings Less: Variable expenses $ $ Contribution margin $ Fixed expenses Net income $ $ 1,000,000 $ 425,000 $ 575,000 $ 580,000 $ (5,000) $ Audit Department 500,000 $ 200,000 $ 300,000 $ 290,000 $ 10,000 $ Consulting Department 400,000 $ 100,000 170,000 $ 55,000 230,000 $ 45,000 225,000 $ 5,000 $ 65,000 (20,000) Based on the profitability of the Consulting Department, the company has decided to close the Consulting Department. Of the total fixed expenses, the following are the costs that won't

icon
Related questions
Question

Accounting

 

Note:-

  • Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
  • Do not provide Excel Screet shot rather use tool table
  • Answer completely.
Prepare a segmented income statement based on the following information: Accurate Accounting Services has the following information: Tax Total Firm Department Billings Less: Variable expenses Contribution margin Fixed expenses Net income $ $ $ $ 1,000,000 $ 425,000 $ 575,000 $ 580,000 $ (5,000) $ Audit Department Consulting Department 500,000 $ 400,000 $ 200,000 $ 170,000 $ 300,000 $ 230,000 $ 290,000 $ 10,000 $ 225,000 $ 5,000 $ 100,000 55,000 45,000 65,000 (20,000) Based on the profitability of the Consulting Department, the company has decided to close the Consulting Department. Of the total fixed expenses, the following are the costs that won't change for each department (Tax $90,000; Audit $ 75,000 and Consulting: $ 30,000. They estimate that if they close the Consulting Department the net income would be $35,000. Are they correct? What will be the impact on earnings, if they discontinue the Consulting Department?
Transcribed Image Text:Prepare a segmented income statement based on the following information: Accurate Accounting Services has the following information: Tax Total Firm Department Billings Less: Variable expenses Contribution margin Fixed expenses Net income $ $ $ $ 1,000,000 $ 425,000 $ 575,000 $ 580,000 $ (5,000) $ Audit Department Consulting Department 500,000 $ 400,000 $ 200,000 $ 170,000 $ 300,000 $ 230,000 $ 290,000 $ 10,000 $ 225,000 $ 5,000 $ 100,000 55,000 45,000 65,000 (20,000) Based on the profitability of the Consulting Department, the company has decided to close the Consulting Department. Of the total fixed expenses, the following are the costs that won't change for each department (Tax $90,000; Audit $ 75,000 and Consulting: $ 30,000. They estimate that if they close the Consulting Department the net income would be $35,000. Are they correct? What will be the impact on earnings, if they discontinue the Consulting Department?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions