Empire Records divides its operations into three divisions. The company CEO noticed that its North American division is under performing and is trying to decide if this division should be eliminated. A recent income statement for its North American division is as follows:

Empire Records

North American Division

Income Statement

Revenue $$572,000$

Divisions sales commissions $(353,000)$

Salary of the division president $(32,800)$

Lease cost for division retail stores $(105,000)$

Allocation of company$-$wide legal cost$*$Footnote asterik $(85,000)$

Net loss $(3,800)$

$*$Footnote asterikThis cost relates to a legal settlement paid by Empire Records during the year.

Required:

Prepare an income statement containing only the relevant information to the segment elimination decision.

Based on the income statement you prepared in Requirement a$,$ should this division be eliminated?