Ingalls Interiors is a sole proprietorship. After the firm has recorded adjustments, it has the balances shown in the work sheet on page 991 for revenue and expense accounts and merchandise inventories for its two depart¬

ments on December 31, the end of the fiscal year. The values of merchandise inventory on January 1 (beginning) are: carpets, $143,460; and draperies,

$71,838. Essential data for direct expenses (and sources of figures) are as follows:

a. Sales Salary Expense (sales personnel work in one department only) is allo¬

cated as follows: carpets, $95,580; draperies, $40,920.

b. Advertising Expense: Newspaper advertising is allocated as follows: carpets,

$9,840; draperies, $2,490.

c. Depreciation: Depreciation of store equipment is apportioned on the basis of the average cost of equipment in each department. The average cost of store equipment is as follows: carpets, $22,500; draperies, $7,500.

d. Bad Debts Expense: Department managers are responsible for granting credit on sales made by their respective departments. Bad Debts Expense is allocated as follows: carpets, $3,888; draperies, $1,572.

Instructions Prepare an income statement to show each department’s departmental margin.