Accounting
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Check my work Williams Company began operations in January 2017 with two operating (selling) departments and one service (office) department. Its departmental Income statements follow. WILLIAMS COMPANY Departmental Income Statements For Year Rnded December 1, 2017 2.5 points Clack iror 170,000 $105,000 275,000 Salea Cost of goods sold Grosa profit Direct expensea 83,30065,100148.400 86,700 39, 900 126,600 eBook 19,500 1,700 1,200 7.400 26,900 2,200 1r650 2,200 32,950 Advertising Store auppliea used Depreciation- Equipment Total direct expenaea 450 1.900 Print 24,300 8,650 Allocated expenses 11,100 ,600 17,000 32,700 65.650 $ 39,220 21,730 60,950 7,080 2,600 13,500 23,180 4,480 4,020 2,000 3,500 9,520 8,170 Rent Utilities expense Share of office department expenses Total allocated expenses expense Potal expenses Net incoms Williams plans to open a third department in January 2018 that will sell paintings. Management predicts that the new department will generate $49,000 in sales with a 75% gross profit margin and will require the following direct expenses: sales salaries, $6,500; advertising. $800: store supplies, $400; and equipment depreciation, $900. It will fit the new department into the current rented space by taking some square footage from the other two departments. When opened, the new painting department will il one-fifth of the space presently used by the clock department and one-fourth used by the mirror department. Management does not predict any increase in utilities costs, which are allocated to the departments in proportion to occupied space (or rent expense). The company allocates office department expenses to the operating departments in proportion to their sales. It expects the painting department to increase total office department expenses by $7,200. Since the painting department will bring new customers into the store, management expects sales in both the clock and mirror departments to increase by 6%.No changes for those departments' gross profit percents or their direct expenses are expected except for store supplies used, which will increase in proportion to sales. Required Prepare departmental income statements that show the company's predicted results of operations for calendar-year 2018 for the three operating (selling) departments and their combined totals. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) points WILLIAMS COMPANY Forecasted Departmental Income Statements For Year Ended December 31, 2018 eBook Clock Mirror Paintings Combined Print Direct expenses Total direct expenses Allocated expenses Total allocated expenses
