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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 $10,505,000
SalesSummer Sports Division 13,610,000
Cost of Goods SoldWinter Sports Division 6,260,000
Cost of Goods SoldSummer Sports Division 7,878,000
Sales expenseWinter Sports Division 1,665,000
Sales expenseSummer Sports Division 1,884,000
Administrative ExpenseWinter Sports Division 1,018,000
Administrative ExpenseSummer Sports Division 1,209,600
Advertising Expense 477,700
Transportation Expense 220,800
Accounts Receivable Collection Expense 120,900
Warehouse Expense 1,164,000

The bases to be used in allocating expenses, together with other essential information, are as follows:

A. Advertising expenseincurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $217,100; Summer Sports Division, $260,600.
B. Transportation expensecharged back to divisions at a charge rate of $8 per bill of lading: Winter Sports Division, 12,300 bills of lading; Summer Sports Division, 15,300 bills of lading.
C. Accounts receivable collection expenseincurred at headquarters, charged back to divisions at a charge rate of $5 per invoice: Winter Sports Division, 9,680 sales invoices; Summer Sports Division, 14,500 sales invoices.
D. Warehouse expensecharged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 92,000 square feet; Summer Sports Division, 102,000 square feet.
Required:
1. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Less or Plus and colons will automatically appear if it is required. Be sure to complete the statement heading. (You may find it useful to work the Supporting Calculations first.)
2. Provide supporting calculations for service department charges.

1. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Less or Plus and colons will automatically appear if it is required. Be sure to complete the statement heading. (You may find it useful to work the Supporting Calculations first.)

GLADES SPORTING GOODS CO.

Divisional Income Statements

1

__________Label___________

Winter Sports Division

Summer Sports Division

2

_______________

______________________

3

4

5

6

7

8

9

10

11

12

13

14

15

2. Provide supporting calculations for service department charges.

Service Department Charges
Winter Sports Division Summer Sports Division Total
Advertising expense ___________ _____________ ________________
Transportation rate per bill of lading ___________ ____________
Number of bills of lading __________ ____________
Transportation expense ____________ ____________ ___________
Accounts receivable collection rate _____________ _____________
Number of sales invoices ____________ _____________
Accounts receivable collection expense ____________ _____________ _____________
Warehouse rate per sq. ft. ___________ ____________
Number of square feet _____________ ___________
Warehouse expense __________ ____________ ____________

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