Departmental Income Statement Elgin Flooring Company sells floor coverings through two departments, carpeting and hard covering (tile and linoleum). Operating information for 2019 appears below. Carpeting Department Hard Covering Department Inventory, January 1, 2019 $60,000 $26,000 Inventory, December 31, 2019 50,000 30,000 Net sales 500,000 800,000 Purchases 300,000 560,000 Purchases returns 28,000 8,000 Purchases discounts 16,000 4,000 Transporation in 18,000 14,000 Traceable departmental expenses 108,000 56,000 Common operating expenses of the firm were $225,000. a. Prepare a departmental income statement showing departmental contribution to common expenses and net income of the firm. Assume an overall effective income tax rate of 20%. Elgin uses a periodic inventory system. Do not use negative signs with any of your answers below. Elgin Flooring Company Departmental Income Statement For the Year Ended December 31, 2019 Carpeting Department Hard Covering Department Net sales 780,000 x 5 480,000 x $ 1,260,000 X Cost of goods sold: Inventory, January 1, 2019 60,000 26,000 86,000 Purchases 484,000 x 362,000 x B46,000 X Purchases returns 28,000 8,000 36,000 Purchases discounts 16.000 4,000 20,000 Transportation in 18,000 14,000 32,000 Cost of goods available for sale 518,000 X 390,000 x 900,000 x Inventory, December 31, 2019 50,000 30,000 80,000 Cost of goods sold 468,000 X 360,000 X 828,000 x Gross Profit 312.000 x 120,000 x 432,000 x Traceable department expenses 108,000 56,000 164,000 Contribution to common expenses 74,286 X 45,714 X 120,000 x Common expenses 120,000 X Income before tax 148,000 x Total 1,260,000 x Elgin Flooring Company Departmental Income Statement For the Year Ended December 31, 2019 Carpeting Department Hard Covering Department Net sales 780,000 $ 480,000 $ Cost of goods sold Inventory, January 1, 2019 60,000 26,000 Purchases 484,000 x 362,000 x Purchases returns 28,000 8,000 Purchases discounts 16,000 4,000 Transportation in 18,000 14,000 Cost of goods available for sale 518,000 x 390,000 x Inventory, December 31, 2019 50,000 30,000 Cost of goods sold 468,000 x 360,000 x Gross Profit 312,000 x 120,000 x Traceable department expenses 108,000 56,000 Contribution to common expenses 74,286 x 45,714 x Common expenses Income before tax Income tax expense Net income 86,000 846,000 x 36,000 20,000 32,000 908,000 80,000 828,000 x 432,000 x 164,000 120,000 120,000 x 148,000 x 51,800 x 96,200 x b. Calculate the gross profit percentage for each department Round to the nearest whole percentage Carpeting department 40 x % Hard Covering department 25 X % Common expenses Income before tax Income tax expense Net income 120,000 x 148,000 X 51,800 X 96,200 x b. Calculate the gross profit percentage for each department. Round to the nearest whole percentage. Carpeting department 40 x % Hard Covering department 25 * % c. If the common expenses were allocated 40% to the carpeting department and 60% to the hard covering department, what would the net income be for each department? Do not use negative signs with any of your answers below. Carpeting Department Hard Covering Department Total Contribution to common expenses $ 0xS 0X $ 0 X Common expenses 0 X 0 % Income before tax OX 0x 0x Income tax expense 0 x 0 x 0 X Net income OXS Ox $ 0x OX Check