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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Divisional income statements and return on investment analysis
High Country Foods Inc. is a diversified food products company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30. 20Y7. are as follows

The management of High Country Foods Inc. is evaluating each division as a basis for planning a future expansion of operations.
Instructions

Prepare conden.sed divisional income statements for the three divisions, assuming that there were no service department charges.

To determine

Concept Introduction:

Divisional income statement shows the Profit or Losses which the operating division generates during the accounting year after deducting cost of goods sold and operating expenses.

To Prepare:

Division Income Statement.

Explanation

The Division income statement for three divisions is as follows:

    Divisional Income Statement
    Breakfast DivisionBakery DivisionFrozen foods Division
    Sales$ 39,600,000$ 18,500,000$ 24,000,000
    Less: Cost of goods sold$ 32,500,000$ 13,500,000$ 14,400,0...

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