Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th
26th Edition
ISBN: 9781305392373
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 24, Problem 24.2EX
To determine
Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.
To prepare: The income statements for C Division and R Division
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Divisional income statement with support department allocations
Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, tech services and purchasing.The corporate expenses for the year ended December 21, 20Y7, are as follows:
Divisional income statements with support department allocations
Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 2017, are as follows:
Tech Services Department
Purchasing Department
Other corporate administrative expenses
Total expense
The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each
department. The services used by the two divisions are as follows:
Consumer Division
Commercial Division
Total
Revenues
Cost of goods sold
Operating expenses
Tech Services
$1,170.000
450,000
800,000
$2,420,000
1,100 computers
700
1,800 computers
The support department allocations…
Profit center responsibility reporting for a service company
Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief
executive officer (CEO) evaluates divisional performance, using operating income as a percent of revenues. The following quarterly
income and expense accounts were provided from the trial balance as of December 31:
Revenues-N Region
Revenues-S Region
Revenues-W Region
Operating Expenses-N Region
Operating Expenses-S Region
Operating Expenses-W Region
Corporate Expenses-Dispatching
Corporate Expenses-Equipment Management
Corporate Expenses-Treasurer's
General Corporate Officers' Salaries
$1,001,400
1,230,600
2,065,700
634,600
732,400
1,249,200
464,600
275,600
152,300
336,300
The company operates three support departments: the Dispatching Department, the Equipment Management Department, and the
Treasurer's Department. The Dispatching Department manages the scheduling and releasing of completed…
Chapter 24 Solutions
Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th
Ch. 24 - Differentiate between centralized and...Ch. 24 - Differentiate between a profit center and an...Ch. 24 - Prob. 3DQCh. 24 - What is the major shortcoming of using income from...Ch. 24 - In a decentralized company in which the divisions...Ch. 24 - How does using the return on investment facilitate...Ch. 24 - Why would a firm use a balanced scorecard in...Ch. 24 - What is the objective of transfer pricing?Ch. 24 - When is the negotiated price approach preferred...Ch. 24 - When using the negotiated price approach to...
Ch. 24 - Budgetary performance for cost center Caroline...Ch. 24 - Budgetary performance for cost center Conley...Ch. 24 - Prob. 24.2APECh. 24 - Prob. 24.2BPECh. 24 - Prob. 24.3APECh. 24 - Prob. 24.3BPECh. 24 - Profit margin, investment turnover, and ROI Cash...Ch. 24 - Profit margin, investment turnover and ROI Briggs...Ch. 24 - Prob. 24.5APECh. 24 - Residual income The Commercial Division of Herring...Ch. 24 - Transfer pricing The materials used by the North...Ch. 24 - Transfer pricing The materials used by the...Ch. 24 - Budget performance reports for cost centers...Ch. 24 - Prob. 24.2EXCh. 24 - Prob. 24.3EXCh. 24 - Prob. 24.4EXCh. 24 - Service department charges In divisional income...Ch. 24 - Service department charges and activity bases...Ch. 24 - Divisional income statements with service...Ch. 24 - Prob. 24.8EXCh. 24 - Profit center responsibility reporting XSport...Ch. 24 - Rate of return on investment The income from...Ch. 24 - Prob. 24.11EXCh. 24 - Determining missing items in return computation...Ch. 24 - Profit margin, investment turnover, and rate of...Ch. 24 - Prob. 24.14EXCh. 24 - Determining missing items in return and residual...Ch. 24 - Determining missing items from computations Data...Ch. 24 - Prob. 24.17EXCh. 24 - Balanced scorecard for a service company American...Ch. 24 - Building a balanced scorecard Hit-n-Kun Inc. owns...Ch. 24 - Decision on transfer pricing Materials used by the...Ch. 24 - Prob. 24.21EXCh. 24 - Budget performance report for a cost center...Ch. 24 - Prob. 24.2APRCh. 24 - Prob. 24.3APRCh. 24 - Effect of proposals on divisional performance A...Ch. 24 - Divisional performance analysis and evaluation The...Ch. 24 - Prob. 24.6APRCh. 24 - Budget performance report for a cost center The...Ch. 24 - Prob. 24.2BPRCh. 24 - Prob. 24.3BPRCh. 24 - Effect of proposals on divisional performance A...Ch. 24 - Divisional performance analysis and evaluation The...Ch. 24 - Prob. 24.6BPRCh. 24 - Prob. 24.1CPCh. 24 - Prob. 24.2CPCh. 24 - Evaluating divisional performance The three...Ch. 24 - Prob. 24.4CPCh. 24 - Evaluating division performance Last Resort...
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- Divisional income statements The following data were summarized from the accounting records for Vintage Construction Company for the year ended October 31, 20Y3. Prepare divisional income statements for Vintage Construction Company.arrow_forwardService department charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of 64,560, and the Purchasing Department had expenses of 40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: A. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. B. Using the cost driver information in (A), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. C. Why does the Residential Division have a larger support department allocation than the other two divisions, even though its sales are lower?arrow_forwardCOMPUTING OPERATING INCOME The sales, cost of goods sold, and total operating expenses of departments A and B of Ash Company are as follows: Compute the departmental operating income for each department.arrow_forward
- Divisional Income Statements with Support Department Allocations Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Services Department $773,500 Purchasing Department 308,000 Other corporate administrative expenses 465,000 Total expense $1,546,500 The other corporate administrative expenses include officers’ salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each department. The services used by the two divisions are as follows: Tech Services Purchasing Consumer Division 400 computers 5,400 purchase orders Commercial Division 250 10,000 Total 650 computers 15,400 purchase…arrow_forwardDivisional Income Statements with Support Department Allocations Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Services Department $905,200 Purchasing Department 380,000 Other corporate administrative expenses 553,000 Total expense $1,838,200 The other corporate administrative expenses include officers’ salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each department. The services used by the two divisions are as follows: Tech Services Purchasing Consumer Division 450 computers 5,300 purchase orders Commercial Division 280 9,900 Total 730 computers 15,200 purchase…arrow_forwardDivisional Income Statements with Support Department Allocations Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: Tech Services Department $1,050,000 Purchasing Department 348,000 Other corporate administrative expenses 601,000 Total expense $1,999,000 The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each department. The services used by the two divisions are as follows: Tech Services Purchasing Consumer Division 460 computers 6,100 purchase orders Commercial Division 290 11,300 Total 750 computers 17,400 purchase orders The support department…arrow_forward
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