Championship Sports Inc. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December $31,20$Y$9,$ the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted:

Line Item Description Amount

SalesWinter Sports Division $$33,915,000$

SalesSummer Sports Division $37,468,000$

Cost of Goods SoldWinter Sports Division $20,349,000$

Cost of Goods SoldSummer Sports Division $21,641,000$

Sales ExpenseWinter Sports Division $5,814,000$

Sales ExpenseSummer Sports Division $5,168,000$

Administrative ExpenseWinter Sports Division $3,391,500$

Administrative ExpenseSummer Sports Division $3,326,900$

Advertising Expense $952,000$

Transportation Expense $513,400$

Accounts Receivable Collection Expense $232,800$

Warehouse Expense $3,230,000$

The bases to be used in allocating expenses, together with other information, are as follows:

Advertising expenseincurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $$447,000$; Summer Sports Division, $$505,000.$

Transportation expenseallocated to divisions at a rate of $$17$ per bill of lading: Winter Sports Division, $14,400$ bills of lading; Summer Sports Division, $15,800$ bills of lading.

Accounts receivable collection expenseincurred at headquarters, allocated to divisions at a rate of $$8$ per invoice: Winter Sports Division, $13,400$ sales invoices; Summer Sports Division, $15,700$ sales invoices.

Warehouse expenseallocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, $150,000$ square feet; Summer Sports Division, $190,000$ square feet.

Question Content Area

Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.

Championship Sports Inc.

Divisional Income Statements

For the Year Ended December $31,20$Y$9$

Line Item Description Winter Sports

Division Summer Sports

Division

Sales $Sales $Sales

Cost of goods sold Cost of goods sold Cost of goods sold

Gross profit $Gross profit $Gross profit

Divisional selling and administrative expenses: blank blank

Divisional selling expenses $Divisional selling expenses $Divisional selling expenses

Divisional administrative expenses Divisional administrative expenses Divisional administrative expenses

Total divisional selling and administrative expenses $Total divisional selling and administrative expenses $Total divisional selling and administrative expenses

Operating income before support department allocations $Operating income before support department allocations $Operating income before support department allocations

Support department allocations:

Advertising expense $Advertising expense $Advertising expense

Transportation expense Transportation expense Transportation expense

Accounts receivable collection expense Accounts receivable collection expense Accounts receivable collection expense

Warehouse expense Warehouse expense Warehouse expense

Total support department allocations $Total support department allocations $Total support department allocations

Operating income $Operating income $Operating income

Feedback Area

Feedback

For each division: Sales minus cost of goods sold equals gross profit minus divisional selling and administrative expenses equals operating income before support department allocations. Support department allocations are subtracted from operating income before support department allocations.

Question Content Area

Provide supporting computations for support department allocations. If required, round per unit amounts to two decimal places and final answers to the nearest dollar.

Championship Sports Inc.

Support Department Allocations

For the Year Ended December $31,20$Y$9$

Line Item Description Winter Sports

Division Summer Sports

Division Total

Advertising expense $Advertising expense $Advertising expense $Advertising expense

Transportation rate per bill of lading $Transportation rate per bill of lading $Transportation rate per bill of lading

Number of bills of lading Number of bills of lading Number of bills of lading

Transportation expense $Transportation expense $Transportation expense $Transportation expense

Accounts receivable collection rate $Accounts receivable collection rate $Accounts receivable collection rate

Number of sales invoices Number of sales invoices Number of sales invoices

Accounts receivable collection expense $Accounts receivable collection expense $Accounts receivable collection expense $Accounts receivable collection expense

Warehouse rate per sq$.$ ft$.$ $Warehouse rate per sq$.$ ft$.$ $Warehouse rate per sq$.$ ft$.$

Number of square feet Number of square feet Number of square feet

Warehouse expense $Warehouse expense $Warehouse expense $Warehouse expense