Question
Profit Center Responsibility Reporting Championship Sports Inc. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts were
Profit Center Responsibility Reporting
Championship Sports Inc. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted:
| SalesWinter Sports Division | $31,185,000 |
| SalesSummer Sports Division | 34,452,000 |
| Cost of Goods SoldWinter Sports Division | 18,711,000 |
| Cost of Goods SoldSummer Sports Division | 19,899,000 |
| Sales ExpenseWinter Sports Division | 5,346,000 |
| Sales ExpenseSummer Sports Division | 4,752,000 |
| Administrative ExpenseWinter Sports Division | 3,118,500 |
| Administrative ExpenseSummer Sports Division | 3,059,100 |
| Advertising Expense | 1,005,000 |
| Transportation Expense | 417,200 |
| Accounts Receivable Collection Expense | 200,200 |
| Warehouse Expense | 2,970,000 |
The bases to be used in allocating expenses, together with other information, are as follows:
Advertising expenseincurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, $472,000; Summer Sports Division, $533,000.
Transportation expenseallocated to divisions at a rate of $14 per bill of lading: Winter Sports Division, 14,200 bills of lading; Summer Sports Division, 15,600 bills of lading.
Accounts receivable collection expenseincurred at headquarters, allocated to divisions at a rate of $7 per invoice: Winter Sports Division, 13,200 sales invoices; Summer Sports Division, 15,400 sales invoices.
Warehouse expenseallocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 160,000 square feet; Summer Sports Division, 200,000 square feet.
Question Content Area
Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.
| Winter Sports Division | Summer Sports Division | |
| Sales | $fill in the blank 2abc4906606d064_1 | $fill in the blank 2abc4906606d064_2 |
| Cost of goods sold | fill in the blank 2abc4906606d064_3 | fill in the blank 2abc4906606d064_4 |
| Gross profit | $fill in the blank 2abc4906606d064_5 | $fill in the blank 2abc4906606d064_6 |
| Divisional selling and administrative expenses: | blank | blank |
| Divisional selling expenses | $fill in the blank 2abc4906606d064_7 | $fill in the blank 2abc4906606d064_8 |
| Divisional administrative expenses | fill in the blank 2abc4906606d064_9 | fill in the blank 2abc4906606d064_10 |
| Total divisional selling and administrative expenses | $fill in the blank 2abc4906606d064_11 | $fill in the blank 2abc4906606d064_12 |
| Operating income before support department allocations | $fill in the blank 2abc4906606d064_13 | $fill in the blank 2abc4906606d064_14 |
| Support department allocations: | ||
| Advertising expense | $fill in the blank 2abc4906606d064_15 | $fill in the blank 2abc4906606d064_16 |
| Transportation expense | fill in the blank 2abc4906606d064_17 | fill in the blank 2abc4906606d064_18 |
| Accounts receivable collection expense | fill in the blank 2abc4906606d064_19 | fill in the blank 2abc4906606d064_20 |
| Warehouse expense | fill in the blank 2abc4906606d064_21 | fill in the blank 2abc4906606d064_22 |
| Total support department allocations | $fill in the blank 2abc4906606d064_23 | $fill in the blank 2abc4906606d064_24 |
| Operating income | $fill in the blank 2abc4906606d064_25 | $fill in the blank 2abc4906606d064_26 |
Question Content Area
Provide supporting schedules for determining support department allocations. If required, round per unit amounts to two decimal places and final answers to the nearest dollar.
| Winter Sports Division | Summer Sports Division | Total | |
| Advertising expense | $fill in the blank e8de96f84033fbd_1 | $fill in the blank e8de96f84033fbd_2 | $fill in the blank e8de96f84033fbd_3 |
| Transportation rate per bill of lading | $fill in the blank e8de96f84033fbd_4 | $fill in the blank e8de96f84033fbd_5 | |
| Number of bills of lading | fill in the blank e8de96f84033fbd_6 | fill in the blank e8de96f84033fbd_7 | |
| Transportation expense | $fill in the blank e8de96f84033fbd_8 | $fill in the blank e8de96f84033fbd_9 | $fill in the blank e8de96f84033fbd_10 |
| Accounts receivable collection rate | $fill in the blank e8de96f84033fbd_11 | $fill in the blank e8de96f84033fbd_12 | |
| Number of sales invoices | fill in the blank e8de96f84033fbd_13 | fill in the blank e8de96f84033fbd_14 | |
| Accounts receivable collection expense | $fill in the blank e8de96f84033fbd_15 | $fill in the blank e8de96f84033fbd_16 | $fill in the blank e8de96f84033fbd_17 |
| Warehouse rate per sq. ft. | $fill in the blank e8de96f84033fbd_18 | $fill in the blank e8de96f84033fbd_19 | |
| Number of square feet | fill in the blank e8de96f84033fbd_20 | fill in the blank e8de96f84033fbd_21 | |
| Warehouse expense | $fill in the blank e8de96f84033fbd_22 | $fill in the blank e8de96f84033fbd_23 | $fill in the blank e8de96f84033fbd_24 |
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New Approach To Financial Accounting No Need Of Cramming Formats
Authors: Samuel A. Olowoniyi ACA
1st Edition
148253150X, 978-1482531503
