Question
Glades Sporting Goods Co. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the
Glades Sporting Goods Co. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y8, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted:
SalesWinter Sports Division | $25,987,500 |
SalesSummer Sports Division | 28,710,000 |
Cost of Goods SoldWinter Sports Division | 15,592,500 |
Cost of Goods SoldSummer Sports Division | 16,582,500 |
Sales ExpenseWinter Sports Division | 4,455,000 |
Sales ExpenseSummer Sports Division | 3,960,000 |
Administrative ExpenseWinter Sports Division | 2,598,800 |
Administrative ExpenseSummer Sports Division | 2,549,300 |
Advertising Expense | 997,000 |
Transportation Expense | 467,200 |
Accounts Receivable Collection Expense | 196,000 |
Warehouse Expense | 2,475,000 |
The bases to be used in allocating expenses, together with other essential information, are as follows:
- Advertising expenseincurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $468,000; Summer Sports Division, $529,000.
- Transportation expenseallocated to divisions at an allocation rate of $16 per bill of lading: Winter Sports Division, 13,900 bills of lading; Summer Sports Division, 15,300 bills of lading.
- Accounts receivable collection expenseincurred at headquarters, allocated to divisions at an allocation rate of $7 per invoice: Winter Sports Division, 12,900 sales invoices; Summer Sports Division, 15,100 sales invoices.
- Warehouse expenseallocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 130,000 square feet; Summer Sports Division, 170,000 square feet.
Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.
Glades Sporting Goods Co. | ||
Divisional Income Statements | ||
For the Year Ended December 31, 20Y8 | ||
Winter Sports Division | Summer Sports Division | |
Sales | $fill in the blank 073e5ffd506fffe_1 | $fill in the blank 073e5ffd506fffe_2 |
Cost of goods sold | fill in the blank 073e5ffd506fffe_3 | fill in the blank 073e5ffd506fffe_4 |
Gross profit | $fill in the blank 073e5ffd506fffe_5 | $fill in the blank 073e5ffd506fffe_6 |
Divisional selling and administrative expenses: | ||
Divisional selling expenses | $fill in the blank 073e5ffd506fffe_7 | $fill in the blank 073e5ffd506fffe_8 |
Divisional administrative expenses | fill in the blank 073e5ffd506fffe_9 | fill in the blank 073e5ffd506fffe_10 |
Total divisional selling and administrative expenses | $fill in the blank 073e5ffd506fffe_11 | $fill in the blank 073e5ffd506fffe_12 |
Income from operations before service department allocations | $fill in the blank 073e5ffd506fffe_13 | $fill in the blank 073e5ffd506fffe_14 |
Less service department cost allocations: | ||
Advertising expense | $fill in the blank 073e5ffd506fffe_15 | $fill in the blank 073e5ffd506fffe_16 |
Transportation expense | fill in the blank 073e5ffd506fffe_17 | fill in the blank 073e5ffd506fffe_18 |
Accounts receivable collection expense | fill in the blank 073e5ffd506fffe_19 | fill in the blank 073e5ffd506fffe_20 |
Warehouse expense | fill in the blank 073e5ffd506fffe_21 | fill in the blank 073e5ffd506fffe_22 |
Total | $fill in the blank 073e5ffd506fffe_23 | $fill in the blank 073e5ffd506fffe_24 |
Income from operations | $fill in the blank 073e5ffd506fffe_25 | $fill in the blank 073e5ffd506fffe_26 |
Provide supporting schedules for determining service department cost allocations.. If required, round per unit amounts to two decimal places and final answers to the nearest dollar.
Glades Sporting Goods Co. | |||
Service Department Charges | |||
For the Year Ended December 31, 20Y8 | |||
Winter Sports Division | Summer Sports Division | Total | |
Advertising expense | $fill in the blank 35dff2f7efeff8e_1 | $fill in the blank 35dff2f7efeff8e_2 | $fill in the blank 35dff2f7efeff8e_3 |
Transportation rate per bill of lading | $fill in the blank 35dff2f7efeff8e_4 | $fill in the blank 35dff2f7efeff8e_5 | |
Number of bills of lading | fill in the blank 35dff2f7efeff8e_6 | fill in the blank 35dff2f7efeff8e_7 | |
Transportation expense | $fill in the blank 35dff2f7efeff8e_8 | $fill in the blank 35dff2f7efeff8e_9 | $fill in the blank 35dff2f7efeff8e_10 |
Accounts receivable collection rate | $fill in the blank 35dff2f7efeff8e_11 | $fill in the blank 35dff2f7efeff8e_12 | |
Number of sales invoices | fill in the blank 35dff2f7efeff8e_13 | fill in the blank 35dff2f7efeff8e_14 | |
Accounts receivable collection expense | $fill in the blank 35dff2f7efeff8e_15 | $fill in the blank 35dff2f7efeff8e_16 | $fill in the blank 35dff2f7efeff8e_17 |
Warehouse rate per sq. ft. | $fill in the blank 35dff2f7efeff8e_18 | $fill in the blank 35dff2f7efeff8e_19 | |
Number of square feet | fill in the blank 35dff2f7efeff8e_20 | fill in the blank 35dff2f7efeff8e_21 | |
Warehouse expense | $fill in the blank 35dff2f7efeff8e_22 | $fill in the blank 35dff2f7efeff8e_23 | $fill in the blank 35dff2f7efeff8e_24 |
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