Profit Center Responsibility Reporting for a Service Company

Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance, using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31:

RevenuesN Region	$1,247,600
RevenuesS Region	1,457,300
RevenuesW Region	2,770,100
Operating ExpensesN Region	790,600
Operating ExpensesS Region	867,300
Operating ExpensesW Region	1,675,200
Corporate ExpensesDispatching	787,500
Corporate ExpensesEquipment Management	148,000
Corporate ExpensesTreasurers	189,700
General Corporate Officers Salaries	419,000

The company operates three support departments: the Dispatching Department, the Equipment Management Department, and the Treasurers Department. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment Management Department manages the railroad cars inventories. It makes sure the right freight cars are at the right place at the right time. The Treasurers Department conducts a variety of services for the company as a whole. The following additional information has been gathered:

	North		South		West
Number of scheduled trains	5,600		6,800		10,100
Number of railroad cars in inventory	900		1,500		1,300

Required:

1. Prepare quarterly income statements showing operating income for the three regions. Use three column headings: North, South, and West. Do not round your interim calculations.

Thomas Railroad Company
Divisional Income Statements
For the Quarter Ended December 31
	North	South	West
Revenues	$fill in the blank d760a8ff4074faf_1	$fill in the blank d760a8ff4074faf_2	$fill in the blank d760a8ff4074faf_3
Operating expenses	fill in the blank d760a8ff4074faf_4	fill in the blank d760a8ff4074faf_5	fill in the blank d760a8ff4074faf_6
Operating income before support department allocations	$fill in the blank d760a8ff4074faf_7	$fill in the blank d760a8ff4074faf_8	$fill in the blank d760a8ff4074faf_9
Support department allocations:
Dispatching	$fill in the blank d760a8ff4074faf_10	$fill in the blank d760a8ff4074faf_11	$fill in the blank d760a8ff4074faf_12
Equipment Management	fill in the blank d760a8ff4074faf_13	fill in the blank d760a8ff4074faf_14	fill in the blank d760a8ff4074faf_15
Total support department allocations	$fill in the blank d760a8ff4074faf_16	$fill in the blank d760a8ff4074faf_17	$fill in the blank d760a8ff4074faf_18
Operating income	$fill in the blank d760a8ff4074faf_19	$fill in the blank d760a8ff4074faf_20	$fill in the blank d760a8ff4074faf_21