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 | $26,775,000 |
| SalesSummer Sports Division | 29,580,000 |
| Cost of Goods SoldWinter Sports Division | 16,065,000 |
| Cost of Goods SoldSummer Sports Division | 17,085,000 |
| Sales ExpenseWinter Sports Division | 4,590,000 |
| Sales ExpenseSummer Sports Division | 4,080,000 |
| Administrative ExpenseWinter Sports Division | 2,677,500 |
| Administrative ExpenseSummer Sports Division | 2,626,500 |
| Advertising Expense | 920,000 |
| Transportation Expense | 377,000 |
| Accounts Receivable Collection Expense | 250,200 |
| Warehouse Expense | 2,550,000 |
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, $432,000; Summer Sports Division, $488,000.
- Transportation expenseallocated to divisions at a rate of $13 per bill of lading: Winter Sports Division, 13,800 bills of lading; Summer Sports Division, 15,200 bills of lading.
- Accounts receivable collection expenseincurred at headquarters, allocated to divisions at a rate of $9 per invoice: Winter Sports Division, 12,800 sales invoices; Summer Sports Division, 15,000 sales invoices.
- Warehouse expenseallocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 130,000 square feet; Summer Sports Division, 170,000 square feet.
Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.
| Championship Sports Inc. | ||
| Divisional Income Statements | ||
| For the Year Ended December 31, 20Y9 | ||
| Winter Sports Division | Summer Sports Division | |
| Sales | $fill in the blank 9dc453f9a04e04c_1 | $fill in the blank 9dc453f9a04e04c_2 |
| Cost of goods sold | fill in the blank 9dc453f9a04e04c_3 | fill in the blank 9dc453f9a04e04c_4 |
| Gross profit | $fill in the blank 9dc453f9a04e04c_5 | $fill in the blank 9dc453f9a04e04c_6 |
| Divisional selling and administrative expenses: | ||
| Divisional selling expenses | $fill in the blank 9dc453f9a04e04c_7 | $fill in the blank 9dc453f9a04e04c_8 |
| Divisional administrative expenses | fill in the blank 9dc453f9a04e04c_9 | fill in the blank 9dc453f9a04e04c_10 |
| Total divisional selling and administrative expenses | $fill in the blank 9dc453f9a04e04c_11 | $fill in the blank 9dc453f9a04e04c_12 |
| Operating income before support department allocations | $fill in the blank 9dc453f9a04e04c_13 | $fill in the blank 9dc453f9a04e04c_14 |
| Support department allocations: | ||
| Advertising expense | $fill in the blank 9dc453f9a04e04c_15 | $fill in the blank 9dc453f9a04e04c_16 |
| Transportation expense | fill in the blank 9dc453f9a04e04c_17 | fill in the blank 9dc453f9a04e04c_18 |
| Accounts receivable collection expense | fill in the blank 9dc453f9a04e04c_19 | fill in the blank 9dc453f9a04e04c_20 |
| Warehouse expense | fill in the blank 9dc453f9a04e04c_21 | fill in the blank 9dc453f9a04e04c_22 |
| Total support department allocations | $fill in the blank 9dc453f9a04e04c_23 | $fill in the blank 9dc453f9a04e04c_24 |
| Operating income | $fill in the blank 9dc453f9a04e04c_25 | $fill in the blank 9dc453f9a04e04c_26 |
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.
| Championship Sports Inc. | |||
| Support Department Allocations | |||
| For the Year Ended December 31, 20Y9 | |||
| Winter Sports Division | Summer Sports Division | Total | |
| Advertising expense | $fill in the blank ace2880f3fb800f_1 | $fill in the blank ace2880f3fb800f_2 | $fill in the blank ace2880f3fb800f_3 |
| Transportation rate per bill of lading | $fill in the blank ace2880f3fb800f_4 | $fill in the blank ace2880f3fb800f_5 | |
| Number of bills of lading | fill in the blank ace2880f3fb800f_6 | fill in the blank ace2880f3fb800f_7 | |
| Transportation expense | $fill in the blank ace2880f3fb800f_8 | $fill in the blank ace2880f3fb800f_9 | $fill in the blank ace2880f3fb800f_10 |
| Accounts receivable collection rate | $fill in the blank ace2880f3fb800f_11 | $fill in the blank ace2880f3fb800f_12 | |
| Number of sales invoices | fill in the blank ace2880f3fb800f_13 | fill in the blank ace2880f3fb800f_14 | |
| Accounts receivable collection expense | $fill in the blank ace2880f3fb800f_15 | $fill in the blank ace2880f3fb800f_16 | $fill in the blank ace2880f3fb800f_17 |
| Warehouse rate per sq. ft. | $fill in the blank ace2880f3fb800f_18 | $fill in the blank ace2880f3fb800f_19 | |
| Number of square feet | fill in the blank ace2880f3fb800f_20 | fill in the blank ace2880f3fb800f_21 | |
| Warehouse expense | $fill in the blank ace2880f3fb800f_22 | $fill in the blank ace2880f3fb800f_23 | $fill in the blank ace2880f3fb800f_24 |
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Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
22nd Edition
324401841, 978-0-324-6250, 0-324-62509-X, 978-0324401844
