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[The following information applies to the questions displayed below] Begant Decor Company's management is trying to decide whether to eliminate Department 200, which has produced losses or low profits for several years. The company's departmental Income statements show the following Dept. 200 $299, eee 287.899 82.99 Combined $726,699 469,690 257,899 ELEGANT DECOR COMPANY Departmental Incote Statements For Year Ended Decenber 23, 2019 Dept. 180 Sales 5436, Bee Cost of goods sold 262,00 Gross profit 174.000 Operating expenses Direct expenses Advertising 17888 Store supplies used 4.02 Depreciation-store equipment 5,888 Total direct expenses 26,880 Allocated expenses Sales salaries 65,800 Rent expense 9,440 Bad debts expense 9.900 Office salary 18,720 Insurance expense 2,880 Miscellaneous office expenses 2,400 Total allocated expenses 1e7, 460 Total expenses 133,468 Net Income (loss) $ 40,549 39.099 4.720 8.169 12.488 1.169 1.689 67.ee 86, 10e $ (3,188) 31.289 3.18 4.000 174,460 219.560 $ 37,440 In analyzing whether to eliminate Department 200, management considers the following a. The company has one office worker who earns $600 per week, or $31.200 per year, and four sales-clerks who each earns $500 per week, or $26.000 per year for each salesclerk b. The full salaries of two salesclerks are charged to Department 100. The full salary of one salesclerk is charged to Department 200. The salary of the fourth clerk, who works half-time in both departments, is divided evenly between the two departments c. Eliminating Department 200 would avoid the sales salaries and the office salary currently allocated to it. However, management prefers another plan. Two salesclerks have indicated that they will be quitting soon Management believes that their work can be done by the other two clerks of the one office worker works in sales half-time Eliminating Department 200 will allow this shift of duties. If this change Is Implemented, half the office worker's salary would be reported as sales solares and half would be reported as office salary d. The store building is rented under a long-term lease that cannot be changed. Therefore, Department 100 will use the space and equipment currently used by Department 200. e. Closing Department 200 will allminate its expenses for advertising, bad debts, and store supplies: 70% of the Insurance expense allocated to it to cover its merchandise inventory, and 25% of the miscellaneous office expenses presently allocated to it DETERMINE 2. Pranare a forecasted annual income statement for the company reflecting the eliminaton of Department 200 assuming that it will mot attest Department 100's sales and gross profit. The statement Showdone them TE ELEGANT DECOR COM Forecasted Annual lovome St Gider Plan to Eliminate Depart Tetal operating expenses