Problem 22-3A 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 $260,000 $115,000 $375,000 Cost of goods sold 127,489 71,300 198,789 Gross profit 132,600 43,780 176,309 Direct expenses Sales salaries 20,500 6,880 27,300 Advertising 2,200 1600 2,800 Store supplies used 1,050 400 1,450 Depreciation Equipment 2,800 Total direct expenses 25,850 8,50034,350 Allocated expenses Rent expense 7,090 3,689 19,690 Utilities expense 2,400 1,300 3,700 Share of office department 12,500 5,eee 17,500 expenses Total allocated expense 21.990 9.900 31.890 Total expenses 47,840 18,400 66,240 Net income $ 84,760 25,300 $110,660 2,100 700 Williams plans to open the department in January 2020 that will sell paintings. Management predicts that the new department will generate 552,000 in sales with a 65 gross profit margin and will require the following direct expenses sales salaries $2.500 vertising $900, store supplies, 5600, and equipment depreciation, $300. 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 one of the ce presently used by the Clock department and one fourth used by the Mirror department Management does not predicta Increase in utilities costs, which are allocated to the departments in proportion to occupied space for rent expense) The company te office department expenses to the operating departments in proportion to their sales it expects the Painting department to Inese total office department expenses by $8.000. Since the Painting department will bring new customers into the store n ement expects sales in both the clock and Mirror departments to increase by 1. No changes for those departments Bercent of the direct expenses are expected except for store supplies used, which will increase proportion to sales Dy taking some square footage from the orner two departments wnen opened ine new Painting gepartment will Till one-tin 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 $8,000. Since the Painting department will bring new customers into the store, management expects sales in both the Clock and Mirror departments to increase by 11% 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 00 0 0 Total direct expenses Allocated expenses Total allocated expense Totul expenses