College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 25, Problem 8SPB
1.
To determine
Prepare an income statement for TK Chamber for the year ended June 30, 20--, showing the departmental operating income and total operating income.
2.
To determine
Compute the departmental operating expense and operating income percentage of both the departments.
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Profit center responsibility reporting
Championship Sports Inc. 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:
Line Item Description
Amount
Sales—Winter Sports Division
$9,600,000
Sales—Summer Sports Division
15,000,000
Cost of Goods Sold—Winter Sports Division
5,500,000
Cost of Goods Sold—Summer Sports Division
9,500,000
Sales Expense—Winter Sports Division
780,000
Sales Expense—Summer Sports Division
1,000,000
Administrative Expense—Winter Sports Division
700,000
Administrative Expense—Summer Sports Division
1,440,000
Advertising Expense
1,099,000
Transportation Expense
150,000
Accounts Receivable Collection Expense
67,000
Warehouse Expense
966,000…
Williams Company began operations in January 2019 with two operating (selling) departments and one service (office) department. Its departmental income statements follow.Â
WILLIAMS COMPANYDepartmental Income StatementsFor Year Ended December 31, 2019
Â
Clock
Mirror
Combined
Sales
$
135,000
Â
$
57,500
Â
$
192,500
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Cost of goods sold
Â
66,150
Â
Â
35,650
Â
Â
101,800
Â
Gross profit
Â
68,850
Â
Â
21,850
Â
Â
90,700
Â
Direct expenses
Â
Â
Â
Â
Â
Â
Â
Â
Â
Sales salaries
Â
20,050
Â
Â
7,000
Â
Â
27,050
Â
Advertising
Â
1,210
Â
Â
525
Â
Â
1,735
Â
Store supplies used
Â
925
Â
Â
425
Â
Â
1,350
Â
Depreciation—Equipment
Â
1,510
Â
Â
325
Â
Â
1,835
Â
Total direct expenses
Â
23,695
Â
Â
8,275
Â
Â
31,970
Â
Allocated expenses
Â
Â
Â
Â
Â
Â
Â
Â
Â
Rent expense
Â
7,020
Â
Â
3,780
Â
Â
10,800
Â
Utilities expense
Â
2,925
Â
Â
1,575
Â
Â
4,500
Â
Share of office department expenses
Â
10,500
Â
Â
4,500
Â
Â
15,000
Â
Total allocated expenses
Â
20,445
Â
Â
9,855
Â
Â
30,300
Â
Total expenses…
Profit Center Responsibility Reporting
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
$29,295,000
Sales—Summer Sports Division
32,364,000
Cost of Goods Sold—Winter Sports Division
17,577,000
Cost of Goods Sold—Summer Sports Division
18,693,000
Sales Expense—Winter Sports Division
5,022,000
Sales Expense—Summer Sports Division
4,464,000
Administrative Expense—Winter Sports Division
2,929,500
Administrative Expense—Summer Sports Division
2,873,700
Advertising Expense
1,012,000
Transportation Expense
435,000
Accounts Receivable Collection Expense
250,200
Warehouse Expense
2,790,000
The bases to be used in allocating expenses, together with other essential…
Chapter 25 Solutions
College Accounting, Chapters 1-27
Ch. 25 - A department that incurs costs and generates...Ch. 25 - Departmental gross profit is the difference...Ch. 25 - Prob. 3TFCh. 25 - Direct expenses are operating expenses incurred...Ch. 25 - Departmental direct operating margin is the...Ch. 25 - A department that incurs costs but does not...Ch. 25 - The difference between a departments net sales and...Ch. 25 - Prob. 3MCCh. 25 - The difference between a departments gross profit...Ch. 25 - The difference between a departments gross profit...
Ch. 25 - Prob. 1CECh. 25 - Prob. 2CECh. 25 - Prob. 3CECh. 25 - Prob. 1RQCh. 25 - Prob. 2RQCh. 25 - Prob. 3RQCh. 25 - Prob. 4RQCh. 25 - Prob. 5RQCh. 25 - Prob. 6RQCh. 25 - Prob. 7RQCh. 25 - Prob. 8RQCh. 25 - Distinguish between departmental gross profit,...Ch. 25 - Prob. 10RQCh. 25 - GROSS PROFIT SECTION OF DE PART MENT AL INCO ME ST...Ch. 25 - ALLOCATING OPERATING EXPENSESQUARE FEET Weaverling...Ch. 25 - ALLOCATING OPERATING EXPENSERELATIVE NET SALES...Ch. 25 - ALLOCATING OPERATING EXPENSEMILES DRIVEN Mercado...Ch. 25 - COMPUTING OPERATING INCOME The sales, cost of...Ch. 25 - Prob. 6SEACh. 25 - INCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT...Ch. 25 - INCOME STATE MENT WITH DEPARTMENTAL OPERATING...Ch. 25 - INCOME STATEMENT WITH DEPART MENTAL DIRECT...Ch. 25 - Prob. 10SPACh. 25 - GROSS PROFIT SECTION OF DEPART MENTAL INCOME...Ch. 25 - Prob. 2SEBCh. 25 - ALLOCATING OPERATING EXPENSERELATIVE NET SALES...Ch. 25 - ALLOCATING OPERATING EXPENSEMILES DRIVEN Herbert...Ch. 25 - Prob. 5SEBCh. 25 - Prob. 6SEBCh. 25 - INCOME STATEMENT WITH DEPART MENTAL GROSS PROFIT...Ch. 25 - Prob. 8SPBCh. 25 - Prob. 9SPBCh. 25 - Prob. 10SPBCh. 25 - Prob. 1MYWCh. 25 - Prob. 1ECCh. 25 - MASTERY PROBLEM Bobs Acme Supermarket has been in...Ch. 25 - CHALLENGE PROBLEM This problem challenges you to...
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