Departmental Income Statement Elgin Flooring Company sells floor coverings through two departments, carpeting and hard covering (tile and linoleum). Operating information for 2016 appears below.

Inventory, January 1, 2016	$65,000	$31,000
Inventory, December 31, 2016	45,000	25,000
Net sales	780,000	480,000
Purchases	484,000	362,000
Purchases returns	28,000	8,000
Purchases discounts	16,000	4,000
Transporation in	18,000	14,000
Traceable departmental expenses	104,000	52,000

Common operating expenses of the firm were $120,000.

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 35%. Elgin uses a periodic inventory system.

Do not use negative signs with any of your answers below.

Net sales	$Answer	$Answer	$Answer
Cost of goods sold:
Inventory, January 1, 2016	Answer	Answer	Answer
Purchases	Answer	Answer	Answer
Purchases returns	Answer	Answer	Answer
Purchases discounts	Answer	Answer	Answer
Transportation in	Answer	Answer	Answer
Cost of goods available for sale	Answer	Answer	Answer
Inventory, December 31, 2016	Answer	Answer	Answer
Cost of goods sold	Answer	Answer	Answer
Gross Profit	Answer	Answer	Answer
Traceable department expenses	Answer	Answer	Answer
Contribution to common expenses	Answer	Answer	Answer
Common expenses	Answer
Income before tax	Answer
Income tax expense	Answer
Net income	$Answer

b. Calculate the gross profit percentage for each department.

Round to the nearest whole percentage.

Carpeting department

Answer%

Hard Covering department

Answer%

c. If the common expenses were allocated 70% to the carpeting department and 30% 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.

Contribution to common expenses	$Answer	$Answer	$Answer
Common expenses	Answer	Answer	Answer
Income before tax	Answer	Answer	Answer
Income tax expense	Answer	Answer	Answer
Net income	$Answer	$Answer	$Answer