Income statements for Fanning Company

Exercise 6-14A Segment elimination decision LO 6-4 Fanning Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. FANNING COMPANY Income Statements for the Year 2018 Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income $ 162,000 (129,000) (20,000) 13.000 (36,000) (5,000) $ (28,000) $ 247,000 (89,000) (25,000) 133.000 (41,000) (14,000) $ 78,000 $260,000 (75,000) (27,000) 158,000 (42,000) $ 116,000 Required a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Complete this question by entering your answers in the tabs below. Required A | Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Effect on income REGA Required B >