please answer both questions (09-6 and 09-3A)
Exercise 09-6 Departmental expense allocation spreadsheet LO P2 Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as total sales for the two operating departments for the year 2019, Sales Department Advertising Administrative Shoes clothing Direct Expenses $ 16,000 29,000 110,000 14,000 Square Feet 900 500 3,400 5,200 $139,200 100,800 The advertising department developed and distributed 120 advertisements during the year. Of these, 12 promoted shoes and 108 promoted clothing. Utilities expense of $71,000 is an indirect expense to all departments. Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign (1) direct expenses to each of the four departments, (2) the $71,000 of utilities expense to the four departments on the basis of floor space occupied, (3) the advertising department's expenses to the two operating departments on the basis of the number of ads placed that promoted a department's products, and (4) the administrative department's expenses to the two operating departments based on the amount of sales. Utilities Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Floor space occupied 900 500 Department Advertising Administrative Shoes Clothing Totals 3,400 5,200 10.000 Allocation Base Numerator Denominator % of Total 900 10,000 9.00 $ 71,000 $ 6,390 500 10.000 5.00 71,000 3,550 3,400 10,000 34.00 71,000 24,140 5,200 10,000 52.00 71,000 36,920 100.00 $ 71.000 Percent of Allocation Base Cost to be Allocated Cost Allocated Numerator Denominator % of Total 121 120 10.00 108 120 90.00 100.00 Percent of Allocation Base Cost to be Allocated Cost Allocated Numerator Denominator % of Total Advertising Department Shoes Clothing Totals Number of ads 12 108 120 Administrativo Allocation Base 0 Department Shoes Clothing Totals 0 0 MARATHON RUNNING SHOP Departmental Expense Allocation Spreadsheet For Year Ended December 31, 2019 Expense Totals Advertising Administrative Shoes Clothing 0 0 0 0 0 0 Direct expense Indirect utilities expenses Total dept. exp. Service Dept. Expenses Advertising Dept Administrative Dept 0 0 0 Total expenses allocated $ 0 $ 0 $ $ 0 S 0 Problem 09-3A Departmental income statements; forecasts LO P3 Williams Company began operations in January 2019 with two operating (selling) departments and one service office) department. Its departmental income statements follow. WILLIAMS COMPANY Departmental Income Statements For Year Ended December 31, 2019 Clock Mirror Combined Sales $ 230,000 $ 105,000 $335,000 Cost of goods sold 112,700 65,100 177,800 Gross profit 117,300 39,900 157,200 Direet expenses Sales salarien 21,000 7.000 20,000 Advertising 1,400 1.000 2,400 Store supplies used 1,400 900 2.300 Depreciation Equipment 1,200 800 2.500 Total direct expenses 25,500 9,700 35,200 Allocated expenses Rent expense 7,020 3,780 10.000 Utilities expense 9,100 4,900 14,000 Share of office department expenses 10.500 4,500 15,000 Total allocated expenses 26,620 13,180 39,800 Total expenses 52.120 22,880 75,000 Net income $ 65,180 6 17.020 $ 02,200 Williams plans to open a third department in January 2020 that will sell paintings, Management predicts that the new department will generate $80,000 in sales with a 55% gross profit margin and will require the following direct expenses: sales salaries, $9,000, advertising, $1,300, store supplies. $1,000; and equipment depreciation $700. It will fit the new department into the current rented space by taking some square footage from the other two departments. When opened, the new Painting department will fill one-fifth of the space presently used by the Clock department and one fourth used by the Mirror denartment Management does not predict any increase in utilities costs which are allocated to the departments in proportion Williams plans to open a third department in January 2020 that will sell paintings. Management predicts that the new department will generate $80,000 in sales with a 55% gross profit margin and will require the following direct expenses: sales salaries. $9,000; advertising, $1,300; store supplies, $1,000; and equipment depreciation, $700. It will fit the new department into the current rented space by taking some square footage from the other two departments. When opened, the new Painting department will fill one-fifth of the space presently used by the Clock department and one fourth used by the Mirror department Management does not predict any increase in utilities costs, which are allocated to the departments in proportion to occupied space (or rent expense). The company allocates office department expenses to the operating departments in proportion to their sales. It expects the Painting department to increase total office department expenses by $27,000. Since the Painting department will bring new customers into the store management expects sales in both the Clock and Mirror departments to increase by 8%. No changes for those departments' gross profit percents or their direct expenses are expected except for store supplies used, which will increase in proportion to sales. Required: Prepare departmental income statements that show the company's predicted results of operations for calendar-year 2020 for the three operating (selling) departments and their combined totals. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) WILLIAMS COMPANY Forecasted Departmental Income Statements For Year Ended December 31, 2020 Clock Mirror Paintings Combined es 0 0 0 0 Direct expenses 0 0 0 0 Total direct expenses Allocated expenses 0 0 0 0 Total allocated expenses Total expenses 0 0 0 0 0 $ 0 $ 0 $ 0