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 income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: $3,780,000 5,673,000 5,130,000 2,678,500 Revenues--N Region Revenues-S Region Revenues-W Region Operating Expenses-N Region Operating Expenses--S Region Operating Expenses-W Region Corporate Expenses-Dispatching Corporate Expenses ---Equipment Management Corporate Expenses-Treasurer's 4,494,890 3,770,050 182,000 1,200,000 734,000 General Corporate Officers' Salaries 1,380,000 The company operates three service departments: the Dispatching Department, the Equipment Management Department, and the Treasurer's Department. The Treasurer's Department and general corporate officers' salaries are not controllable by division management. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment Management Department manages the inventories of railroad cars. It makes sure the right freight cars are at the right place at the right time. The Treasurer's Department conducts a variety of services for the company as a whole. The following additional information has been gathered: Previous Next The company operates three service departments: the Dispatching Department, the Equipment Management Department, and the Treasurer's Department. The Treasurer's Department and general corporate officers' salaries are not controllable by division management. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment Management Department manages the inventories of railroad cars. It makes sure the right freight cars are at the right place at the right time. The Treasurer's Department conducts a variety of services for the company as a whole. The following additional information has been gathered: North South West 650 845 Number of scheduled trains Number of railroad cars in Inventory 1,105 8 ho 6,000 9,600 Required: 1. Prepare quarterly income statements showing income from operations for the three regions. Use three column headings: North, South, and West. Round your interim calculations to three decimal places, if required. Thomas Railroad Company Divisional Income Statements For the Quarter Ended December 31 North South West 3.780.000 5,673.000 5.130,000 Revenues 2.678.500 3.770.050 4.494,890 Operating expenses 1.178.110 1.359.950 1.101,500 Income from operations before service department charges Less service department charges: North South West Revenues 3,780,000 5,673,000 5.130,000 2,678,500 4,494,890 3,770,050 Operating expenses 1.101,500 1,178,110 1,359,950 Income from operations before service department charges $ Less service department charges: Dispatching 45,500 77.350 59,150 300,000 420,000 480,000 Equipment management Total service department charges 756.000 680,760 820,800 Income from operations