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. ok nt ences WILLIAMS COMPANY Departmental Income Statements For Year Ended December 31, 2019 Clock Mirror Combined Sales $ 150,000 $ 95,000 $ 245,000 Cost of goods sold 73,500 58,900 132,400 Gross profit 76,500 36,100 112,600 Direct expenses Sales salaries 20,000 7,400 27,400 Advertising 1,800 700 2,500 Store supplies used 950 400 1,350 Depreciation-Equipment 2.200 400 2,600 Total direct expenses 24,950 8,900 33,850 Allocated expenses Rent expense 7,040 4,020 11,060 Utilities expense 2,400 1,500 3.900 Share of office department expenses 13,500 9.500 23,000 Total allocated expenses. 22.940 15.020 37.960 Total expenses 42.89 23.920 71,810 Net Income 520,$10 $ 12,180 $ 40,790 on the intine Management predicts that the new department will CI 24,95 8,990 33,850 Total direct expenses Allocated expenses Rent expense Utilities expense Share of office department expenses Total allocated expenses Total expenses Net income 7,040 4,020 11,060 2,400 1,500 3,989 13,500 9,560 23,089 22,940 15,020 37,960 47,890 23,920 71,810 $ 28,610 $ 12,180 $ 40,790 Williams plans to open a third department in January 2020 that will sell paintings. Management predicts that the new department will generate $46,000 in sales with a 65% gross profit margin and will require the following direct expenses: sales salaries, $6,500; advertising, $900; store supplies, $300, and equipment depreciation 5900. 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 for 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 $8,300. Since the Painting department will bring new customers into the store, management expects sales in both the Clock and Mirror departments to increase by 14%. 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 C 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 answe to nearest whole dollar amount.) WILLIAMS COMPANY Forecasted Departmental Income Statements For Year Ended December 31, 2020 Clock Mirror Paintings Combined 0 0 0 Direct expenses 0 0 0 Total direct expenses Allocated expenses lapter Clock Mirror Paintings Combined 0 0 0 Direct expenses 0 0 0 0 nces Total direct expenses Allocated expenses 0 0 0 Total allocated expenses Total expenses 0 0 0 0 $ 0 0 $ 0 $ 0 $ 0 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 $ 11,000 20,000 132,000 19,000 Square Feet 770 1,100 5,280 3,850 $114,400 105,600 The advertising department developed and distributed 160 advertisements during the year. Of these, 32 promoted shoes and 128 promoted clothing. Utilities expense of $75,000 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 $75,000 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 Department Numerator Denominator % of Total 0 Advertising Utilities Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Numerator Denominator % of Total 0 0 0 Department Advertising Administrative Shoes Clothing Totals 0 0 0 0 es Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Numerator Denominator % of Total Advertising Department Shoes Clothing Totals 0 0 0 Administrative Allocation Base Percent of Allocation Base Cost to bo Allocated Allocated Cost Numerator Denominator % of Total 0 Department Shoes Clothing Totals 0 0 0 Clothing 0 Totals Administrative Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Numerator Denominator % of Total 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. Total expenses allocated 0 0 $ 0 $ 0$ 0 $ 0 S 0