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Analyze Operational Changes The management of Manchester's Department Store is concerned about the operation of its sporting goods department, which has not been very successful. The following condensed income statement gives the latest year's results: Sporting Goods Department All Other Departments Sales $480,000 $2,400,000 Cost ofgoods sold 360,000 1,560,000 Gross profit 20,000 B40,000 Direct expenses 67,500 336,000 Indirectexpenses 48,000 240,000 Total expenses 15,500 576,000 Net income (Loss) $4,500 $264,000 a. Calculate the gross profit percentage for the sporting goods department and for the other departments as a group. Sporting goods department 0 % All other departments 0 % b. It is estimated that if an additional $10,500 were spent on promotion of sporting goods, average prices can be raised 5% without affecting physical volume of goods sold. What effect would this have on the operating results of the sporting goods department? (Ignore the effect of income tax. Use a negative sign to indicate a net loss answer; otherwise do not use negative signs with your answers. Sporting Goods Department Income Statement Sales $ 0 Cost of goods sold 0 Gross profit o Direct expenses 0 Indirectexpenses o Total expenses Net income (Loss) c. Alternatively, it is estimated that physical volume of goods sold could be increased 8% if an additional $15,000 were spent on promotion of sporting goods and prices were not increased. Assuming that operating expenses remain the same, what effect would this have on the operating results of the sporting goods department? (Ignore the effect of income tax.) Use a negative sign to indicate a net loss answer; otherwise do not use negative signs with your answers. Sporting Goods Department Income Statement Sales $ 0 Cost of goods sold O Gross profit o Direct expenses Indirectexpenses o Total expenses Net income (Loss)Hampton Company reports the following information for its recent calendar year. Income Statement Data Selected Year-End Balance Sheet Data Sales $78,000 Accounts receivable increase $6,900 Expenses : Inventory decrease 4, 900 Cost of goods sold 36,000 Salaries payable increase 700 Salaries expense 12, 000 Depreciation expense 8,900 Net income $22,000 Required: Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from operating activities