Selected information from the adjusted trial balance of Warmers Inc. as of December 31, 2019, follows:

INSTRUCTIONS
Prepare a departmental income statement for the year ended December 31, 2019. The bases for allocating indirect expenses are given below. Show all allocations in a neat and orderly form.
1. Insurance Expense: in proportion to the total of the furniture and fixtures (the gross assets before depreciation) and the ending inventory in the departments. These totals are as follows:
Department A................................$180,000
Department B..................................120,000
Total...............................................$300,000

2. Rent Expense and Utilities Expense: on the basis of floor space occupied, as follows:

Department A..................................4,900 square feet
Department B..................................2,100 square feet
Total.................................................7,000 square feet

3. Office Salaries Expense, Other Office Expenses, and Depreciation Expense€”Office Equipment: on the basis of the gross sales in each department.
4. Uncollectible Accounts Expense: on the basis of net sales in each department.
5. Depreciation Expense€”Furniture and Fixtures: in proportion to cost of furniture and fixtures in each department. These costs are as follows.

Department A..................................$39,000
Department B....................................21,000
Total.................................................$60,000

Analyze: Which department reports the higher return on net sales?

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Department A Department B Total $ 55,000 $ 25,000 $ 80,000 Merchandise Inventory, January 1 51,000 Merchandise Inventory, December 31 12,000 63,000 Sales 501,000 334,000 835,000 8,350 Sales Returns and Allowances 5,010 3,340 Purchases 250,000 165,000 415,000 600 1,200 Freight In 600 Purchases Returns and Allowances 2,000 600 2,600 60,000 Sales Salaries Expense 110,000 170,000 Advertising Expense 16,000 6,000 22,000 785 Store Supplies Expense 760 25 Cash Short or Over 45 85 130 Insurance Expense 16,000 Rent Expense 46,000 Utilities Expense 7,000 Office Salaries Expense 50,000 Other Office Expense 1,900 Uncollectible Accounts Expense 6,000 Depreciation Expense–Furniture and Fixtures 7,000 600 Depreciation Expense–Office Equipment Interest Income 400 Interest Expense 600