Profit Center Responsibility Reporting 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 $24,255,000 Sales—Summer Sports Division 26,796,000 Cost of Goods Sold—Winter Sports Division 14,553,000 Cost of Goods Sold—Summer Sports Division 15,477,000 Sales Expense—Winter Sports Division 4,158,000 Sales Expense—Summer Sports Division 3,696,000 Administrative Expense—Winter Sports Division 2,425,500 Administrative Expense—Summer Sports Division 2,379,300 Advertising Expense 1,037,000 Transportation Expense 522,000 Accounts Receivable Collection Expense 250,200 Warehouse Expense 2,310,000 The bases to be used in allocating expenses, together with other essential information, are as follows: Advertising expense—incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $487,000; Summer Sports Division, $550,000. Transportation expense—allocated to divisions at an allocation rate of $18 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, allocated to divisions at an allocation rate of $9 per invoice: Winter Sports Division, 12,800 sales invoices; Summer Sports Division, 15,000 sales invoices. Warehouse expense—allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 120,000 square feet; Summer Sports Division, 160,000 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 $fill in the blank 650ae4fb6f9cffc_1 $fill in the blank 650ae4fb6f9cffc_2 Cost of goods sold fill in the blank 650ae4fb6f9cffc_3 fill in the blank 650ae4fb6f9cffc_4 Gross profit $fill in the blank 650ae4fb6f9cffc_5 $fill in the blank 650ae4fb6f9cffc_6 Divisional selling and administrative expenses: Divisional selling expenses $fill in the blank 650ae4fb6f9cffc_7 $fill in the blank 650ae4fb6f9cffc_8 Divisional administrative expenses fill in the blank 650ae4fb6f9cffc_9 fill in the blank 650ae4fb6f9cffc_10 Total divisional selling and administrative expenses $fill in the blank 650ae4fb6f9cffc_11 $fill in the blank 650ae4fb6f9cffc_12 Income from operations before service department allocations $fill in the blank 650ae4fb6f9cffc_13 $fill in the blank 650ae4fb6f9cffc_14 Less service department cost allocations: Advertising expense $fill in the blank 650ae4fb6f9cffc_15 $fill in the blank 650ae4fb6f9cffc_16 Transportation expense fill in the blank 650ae4fb6f9cffc_17 fill in the blank 650ae4fb6f9cffc_18 Accounts receivable collection expense fill in the blank 650ae4fb6f9cffc_19 fill in the blank 650ae4fb6f9cffc_20 Warehouse expense fill in the blank 650ae4fb6f9cffc_21 fill in the blank 650ae4fb6f9cffc_22 Total $fill in the blank 650ae4fb6f9cffc_23 $fill in the blank 650ae4fb6f9cffc_24 Income from operations $fill in the blank 650ae4fb6f9cffc_25 $fill in the blank 650ae4fb6f9cffc_26 Provide supporting schedules for determining service department cost allocations.. 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 $fill in the blank 2d45aa02403efd2_1 $fill in the blank 2d45aa02403efd2_2 $fill in the blank 2d45aa02403efd2_3 Transportation rate per bill of lading $fill in the blank 2d45aa02403efd2_4 $fill in the blank 2d45aa02403efd2_5 Number of bills of lading fill in the blank 2d45aa02403efd2_6 fill in the blank 2d45aa02403efd2_7 Transportation expense $fill in the blank 2d45aa02403efd2_8 $fill in the blank 2d45aa02403efd2_9 $fill in the blank 2d45aa02403efd2_10 Accounts receivable collection rate $fill in the blank 2d45aa02403efd2_11 $fill in the blank 2d45aa02403efd2_12 Number of sales invoices fill in the blank 2d45aa02403efd2_13 fill in the blank 2d45aa02403efd2_14 Accounts receivable collection expense $fill in the blank 2d45aa02403efd2_15 $fill in the blank 2d45aa02403efd2_16 $fill in the blank 2d45aa02403efd2_17 Warehouse rate per sq. ft. $fill in the blank 2d45aa02403efd2_18 $fill in the blank 2d45aa02403efd2_19 Number of square feet fill in the blank 2d45aa02403efd2_20 fill in the blank 2d45aa02403efd2_21 Warehouse expense $fill in the blank 2d45aa02403efd2_22 $fill in the blank 2d45aa02403efd2_23 $fill in the blank 2d45aa02403efd2_24

Profit Center Responsibility Reporting 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 $24,255,000 Sales—Summer Sports Division 26,796,000 Cost of Goods Sold—Winter Sports Division 14,553,000 Cost of Goods Sold—Summer Sports Division 15,477,000 Sales Expense—Winter Sports Division 4,158,000 Sales Expense—Summer Sports Division 3,696,000 Administrative Expense—Winter Sports Division 2,425,500 Administrative Expense—Summer Sports Division 2,379,300 Advertising Expense 1,037,000 Transportation Expense 522,000 Accounts Receivable Collection Expense 250,200 Warehouse Expense 2,310,000 The bases to be used in allocating expenses, together with other essential information, are as follows: Advertising expense—incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $487,000; Summer Sports Division, $550,000. Transportation expense—allocated to divisions at an allocation rate of $18 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, allocated to divisions at an allocation rate of $9 per invoice: Winter Sports Division, 12,800 sales invoices; Summer Sports Division, 15,000 sales invoices. Warehouse expense—allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 120,000 square feet; Summer Sports Division, 160,000 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 $fill in the blank 650ae4fb6f9cffc_1 $fill in the blank 650ae4fb6f9cffc_2 Cost of goods sold fill in the blank 650ae4fb6f9cffc_3 fill in the blank 650ae4fb6f9cffc_4 Gross profit $fill in the blank 650ae4fb6f9cffc_5 $fill in the blank 650ae4fb6f9cffc_6 Divisional selling and administrative expenses: Divisional selling expenses $fill in the blank 650ae4fb6f9cffc_7 $fill in the blank 650ae4fb6f9cffc_8 Divisional administrative expenses fill in the blank 650ae4fb6f9cffc_9 fill in the blank 650ae4fb6f9cffc_10 Total divisional selling and administrative expenses $fill in the blank 650ae4fb6f9cffc_11 $fill in the blank 650ae4fb6f9cffc_12 Income from operations before service department allocations $fill in the blank 650ae4fb6f9cffc_13 $fill in the blank 650ae4fb6f9cffc_14 Less service department cost allocations: Advertising expense $fill in the blank 650ae4fb6f9cffc_15 $fill in the blank 650ae4fb6f9cffc_16 Transportation expense fill in the blank 650ae4fb6f9cffc_17 fill in the blank 650ae4fb6f9cffc_18 Accounts receivable collection expense fill in the blank 650ae4fb6f9cffc_19 fill in the blank 650ae4fb6f9cffc_20 Warehouse expense fill in the blank 650ae4fb6f9cffc_21 fill in the blank 650ae4fb6f9cffc_22 Total $fill in the blank 650ae4fb6f9cffc_23 $fill in the blank 650ae4fb6f9cffc_24 Income from operations $fill in the blank 650ae4fb6f9cffc_25 $fill in the blank 650ae4fb6f9cffc_26 Provide supporting schedules for determining service department cost allocations.. 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 $fill in the blank 2d45aa02403efd2_1 $fill in the blank 2d45aa02403efd2_2 $fill in the blank 2d45aa02403efd2_3 Transportation rate per bill of lading $fill in the blank 2d45aa02403efd2_4 $fill in the blank 2d45aa02403efd2_5 Number of bills of lading fill in the blank 2d45aa02403efd2_6 fill in the blank 2d45aa02403efd2_7 Transportation expense $fill in the blank 2d45aa02403efd2_8 $fill in the blank 2d45aa02403efd2_9 $fill in the blank 2d45aa02403efd2_10 Accounts receivable collection rate $fill in the blank 2d45aa02403efd2_11 $fill in the blank 2d45aa02403efd2_12 Number of sales invoices fill in the blank 2d45aa02403efd2_13 fill in the blank 2d45aa02403efd2_14 Accounts receivable collection expense $fill in the blank 2d45aa02403efd2_15 $fill in the blank 2d45aa02403efd2_16 $fill in the blank 2d45aa02403efd2_17 Warehouse rate per sq. ft. $fill in the blank 2d45aa02403efd2_18 $fill in the blank 2d45aa02403efd2_19 Number of square feet fill in the blank 2d45aa02403efd2_20 fill in the blank 2d45aa02403efd2_21 Warehouse expense $fill in the blank 2d45aa02403efd2_22 $fill in the blank 2d45aa02403efd2_23 $fill in the blank 2d45aa02403efd2_24

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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Profit Center Responsibility Reporting

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	$24,255,000
Sales—Summer Sports Division	26,796,000
Cost of Goods Sold—Winter Sports Division	14,553,000
Cost of Goods Sold—Summer Sports Division	15,477,000
Sales Expense—Winter Sports Division	4,158,000
Sales Expense—Summer Sports Division	3,696,000
Administrative Expense—Winter Sports Division	2,425,500
Administrative Expense—Summer Sports Division	2,379,300
Advertising Expense	1,037,000
Transportation Expense	522,000
Accounts Receivable Collection Expense	250,200
Warehouse Expense	2,310,000

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

Advertising expense—incurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $487,000; Summer Sports Division, $550,000.
Transportation expense—allocated to divisions at an allocation rate of $18 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, allocated to divisions at an allocation rate of $9 per invoice: Winter Sports Division, 12,800 sales invoices; Summer Sports Division, 15,000 sales invoices.
Warehouse expense—allocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 120,000 square feet; Summer Sports Division, 160,000 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	$fill in the blank 650ae4fb6f9cffc_1	$fill in the blank 650ae4fb6f9cffc_2
Cost of goods sold	fill in the blank 650ae4fb6f9cffc_3	fill in the blank 650ae4fb6f9cffc_4
Gross profit	$fill in the blank 650ae4fb6f9cffc_5	$fill in the blank 650ae4fb6f9cffc_6
Divisional selling and administrative expenses:
Divisional selling expenses	$fill in the blank 650ae4fb6f9cffc_7	$fill in the blank 650ae4fb6f9cffc_8
Divisional administrative expenses	fill in the blank 650ae4fb6f9cffc_9	fill in the blank 650ae4fb6f9cffc_10
Total divisional selling and administrative expenses	$fill in the blank 650ae4fb6f9cffc_11	$fill in the blank 650ae4fb6f9cffc_12
Income from operations before service department allocations	$fill in the blank 650ae4fb6f9cffc_13	$fill in the blank 650ae4fb6f9cffc_14
Less service department cost allocations:
Advertising expense	$fill in the blank 650ae4fb6f9cffc_15	$fill in the blank 650ae4fb6f9cffc_16
Transportation expense	fill in the blank 650ae4fb6f9cffc_17	fill in the blank 650ae4fb6f9cffc_18
Accounts receivable collection expense	fill in the blank 650ae4fb6f9cffc_19	fill in the blank 650ae4fb6f9cffc_20
Warehouse expense	fill in the blank 650ae4fb6f9cffc_21	fill in the blank 650ae4fb6f9cffc_22
Total	$fill in the blank 650ae4fb6f9cffc_23	$fill in the blank 650ae4fb6f9cffc_24
Income from operations	$fill in the blank 650ae4fb6f9cffc_25	$fill in the blank 650ae4fb6f9cffc_26

Provide supporting schedules for determining service department cost allocations.. 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	$fill in the blank 2d45aa02403efd2_1	$fill in the blank 2d45aa02403efd2_2	$fill in the blank 2d45aa02403efd2_3
Transportation rate per bill of lading	$fill in the blank 2d45aa02403efd2_4	$fill in the blank 2d45aa02403efd2_5
Number of bills of lading	fill in the blank 2d45aa02403efd2_6	fill in the blank 2d45aa02403efd2_7
Transportation expense	$fill in the blank 2d45aa02403efd2_8	$fill in the blank 2d45aa02403efd2_9	$fill in the blank 2d45aa02403efd2_10
Accounts receivable collection rate	$fill in the blank 2d45aa02403efd2_11	$fill in the blank 2d45aa02403efd2_12
Number of sales invoices	fill in the blank 2d45aa02403efd2_13	fill in the blank 2d45aa02403efd2_14
Accounts receivable collection expense	$fill in the blank 2d45aa02403efd2_15	$fill in the blank 2d45aa02403efd2_16	$fill in the blank 2d45aa02403efd2_17
Warehouse rate per sq. ft.	$fill in the blank 2d45aa02403efd2_18	$fill in the blank 2d45aa02403efd2_19
Number of square feet	fill in the blank 2d45aa02403efd2_20	fill in the blank 2d45aa02403efd2_21
Warehouse expense	$fill in the blank 2d45aa02403efd2_22	$fill in the blank 2d45aa02403efd2_23	$fill in the blank 2d45aa02403efd2_24

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Divisional income statement shows all revenues and expenses of that particular division and then will show net profit or loss of division.

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