Departmental Income Statement Perkins Appliance & Furniture Company has two departments, appliances and furniture. Operating information for 2016 appears below.

				Alliance Department	Furniture Department
Inventory, January 1, 2016				$140,000	$110,000
Inventory, December 31, 2016				55,600	28,000
Net sales				1,120,000	760,000
Purchases				640,000	480,000
Purchases discounts				8,000	6,000
Transporation in				18,000	16,000
Traceable departmental expenses				181,600	64,000

Common operating expenses of the firm were $180,000.

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 40%. Perkins uses a periodic inventory system.

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

Perkins Appliance & Furniture Company Departmental Income Statement For the Year Ended December 31, 2016
				Appliance Department	Furniture Department	Total
Net sales				Answer	Answer	Answer
Cost of goods sold:
Inventory, January 1, 2016				Answer	Answer	Answer
Purchases				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.

Appliance department

Answer%

Furniture department

Answer%

c. If the common expenses were allocated 70% to the appliance department and 30% to the furniture department, what would the net income be for each department?

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

				Appliance Department	Furniture Department	Total
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

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