Bonanza Entertainment began operations in January 2017 with two operating (selling) departments and one service (office) department. Its departmental income statements follow BONANZA ENTERTAINMENT Departmental Income Statements For Year Ended December 31, 2017 Movies Video Games Combined Sales $600,000$200,000 420,000154,000 46,000 $800,000 574,000 226,000 180,000 Direct expenses Sales salaries dvertising... 37,000 12,500 4,000 4,500 58,000 15,000 6,000 1,000 3,000 25,000 52,000 18,500 5,000 7,500 83,000 Depreciation-Equipment Allocated expenses 41,000 7,380 56,250 Total allocated expenses..10,030 9,000 1,620 18,750 50,000 9,000 75,000 134,000 217,000 9,000 Share of office department expenses. .. 162,630 54,370 $17.370 8.370 900 $17,.370 he company plans to open a third department in January 2018 that will sell compact discs. Management edicts that the new department will generate $300,000 in sales with a 35% gross profit margin and will quire the following direct expenses: sales salaries, $18,000; advertising. S10,000; store supplies 2.000, and equipment depreciation, $1,200. The company will fit the new department into the current e by taking some square footage from the other two departments. When opened, the new compact disc department will fill one-fourth of the space presently used by the movie department and f the space used by the video game department. Management does not predict any increase in 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 ales. It expects the compact disc department to increase total office department expenses by $10,000. expects sales in vie and video game departments to increase by 8%. No changes or those departments' gross profit percents or for their direct expenses are expected except for store supplies used, which will in- ented spac Since the compact disc department will bring new customers into the store, management both the m crease in proportion to sales. Required Prepare departmental income statements that show the company's predicted results of operations for che calendar-year 2018 for the three operating (selling) departments and their combined totals. (Round Mov percents to the nearest one-tenth and dollar amounts to the nearest whole dollar.) $52