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. Carpeting Department Hard Covering Department Inventory, January 1, 2016 $68,000 $34,000 Inventory, December 31, 2016 42,000 22,000 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 101,000 49,000 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 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. Elgin Flooring Company Departmental Income Statement For the Year Ended December 31, 2016 Carpeting Department Hard Covering Department Total Net sales OXS Ox $ Cost of goods sold: Inventory, January 1, 2016 68000 34000 102000 Purchases 484000 362000 846000 Purchases returns 28000 8000 36000 Purchases discounts 16000 4000 20000 Transportation in 18000 14000 32000 Cost of goods available for sale 526000 398000 924000 Inventory, December 31, 2016 42000 22000 64000 Cost of goods sold ARADO 376000 860000 Gross Profit 0 X Traceable department expenses 101000 49000 150000 Contribution to common expenses 526000 42000 484000 Cost of goods available for sale Inventory, December 31, 2016 Cost of goods sold Gross Profit Traceable department expenses Contribution to common expenses 398000 22000 376000 0 x 49000 924000 64000 860000 OX 150000 0 X 101000 0 x Common expenses 120000 & Be... Income before tax Income tax expense Net income On: Ch... b. Calculate the gross profit percentage for each department. Round to the nearest whole percentage. Carpeting department 0 X % Hard Covering department nect Math 0 X % c. If the common expenses were allocated 70% to the carpeting department and 30% to the hard covering depart would the net income be for each department? 0 X % 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. Carpeting Department Hard Covering Department Total Contribution to common expenses 5 OXS O XS Common expenses 0 Income before tax Income tax expense Net income OXS Check
