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 $10,540,000 Sales—Summer Sports Division 13,650,000 Cost of Goods Sold—Winter Sports Division 6,265,000 Cost of Goods Sold—Summer Sports Division 7,884,000 Sales expense—Winter Sports Division 1,665,000 Sales expense—Summer Sports Division 1,884,000 Administrative Expense—Winter Sports Division 1,020,000 Administrative Expense—Summer Sports Division 1,202,800 Advertising Expense 480,300 Transportation Expense 205,100 Accounts Receivable Collection Expense 120,150 Warehouse Expense 1,146,000 The bases to be used in allocating expenses, together with other essential information, are as follows: A. Advertising expense—incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $217,900; Summer Sports Division, $262,400. B. Transportation expense—charged back to divisions at a charge rate of $7 per bill of lading: Winter Sports Division, 14,300 bills of lading; Summer Sports Division, 15,000 bills of lading. C. Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $5 per invoice: Winter Sports Division, 9,600 sales invoices; Summer Sports Division, 14,430 sales invoices. D. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 90,000 square feet; Summer Sports Division, 101,000 square feet. Required: 1. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. (Complete the Supporting Calculations tab first.) A colon (:) will fill in where needed. 2. Provide supporting calculations for service department charges.

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 $10,540,000 Sales—Summer Sports Division 13,650,000 Cost of Goods Sold—Winter Sports Division 6,265,000 Cost of Goods Sold—Summer Sports Division 7,884,000 Sales expense—Winter Sports Division 1,665,000 Sales expense—Summer Sports Division 1,884,000 Administrative Expense—Winter Sports Division 1,020,000 Administrative Expense—Summer Sports Division 1,202,800 Advertising Expense 480,300 Transportation Expense 205,100 Accounts Receivable Collection Expense 120,150 Warehouse Expense 1,146,000 The bases to be used in allocating expenses, together with other essential information, are as follows: A. Advertising expense—incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $217,900; Summer Sports Division, $262,400. B. Transportation expense—charged back to divisions at a charge rate of $7 per bill of lading: Winter Sports Division, 14,300 bills of lading; Summer Sports Division, 15,000 bills of lading. C. Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $5 per invoice: Winter Sports Division, 9,600 sales invoices; Summer Sports Division, 14,430 sales invoices. D. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 90,000 square feet; Summer Sports Division, 101,000 square feet. Required: 1. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. (Complete the Supporting Calculations tab first.) A colon (:) will fill in where needed. 2. Provide supporting calculations for service department charges.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 6SEB

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Question

Sales—Winter Sports Division	$10,540,000
Sales—Summer Sports Division	13,650,000
Cost of Goods Sold—Winter Sports Division	6,265,000
Cost of Goods Sold—Summer Sports Division	7,884,000
Sales expense—Winter Sports Division	1,665,000
Sales expense—Summer Sports Division	1,884,000
Administrative Expense—Winter Sports Division	1,020,000
Administrative Expense—Summer Sports Division	1,202,800
Advertising Expense	480,300
Transportation Expense	205,100
Accounts Receivable Collection Expense	120,150
Warehouse Expense	1,146,000

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

A.	Advertising expense—incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $217,900; Summer Sports Division, $262,400.
B.	Transportation expense—charged back to divisions at a charge rate of $7 per bill of lading: Winter Sports Division, 14,300 bills of lading; Summer Sports Division, 15,000 bills of lading.
C.	Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $5 per invoice: Winter Sports Division, 9,600 sales invoices; Summer Sports Division, 14,430 sales invoices.
D.	Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 90,000 square feet; Summer Sports Division, 101,000 square feet.

	Required:
1.	Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. (Complete the Supporting Calculations tab first.) A colon (:) will fill in where needed.
2.	Provide supporting calculations for service department charges.

Labels
Divisional selling and administrative expenses
Service department charges
Amount Descriptions
Accounts receivable collection expense
Advertising expense
Cost of goods sold
Divisional administrative expenses
Divisional selling expenses
Gross profit
Income from operations
Income from operations before service departments charges
Sales
Total divisional selling and administrative expenses
Total service department charges
Transportation expense
Warehouse expense

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