Profit center responsibility reporting Instructions Labels and Amount Descriptions Divisional Income Statements Supporting Calculations Instructions Glades Sporting Goods Co. operates two divisions--the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y8, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: $10,525,000 13,610,000 6,280,000 7.868.000 1,650.000 1.894,000 Sales - Winter Sports Division Sales-Summer Sports Division Cost of Goods Sold-Winter Sports Division Cost of Goods Sold-Summer Sports Division Sales expense-Winter Sports Division Sales expense - Summer Sports Division Administrative Expense-Winter Sports Division Administrative Expense-Summer Sports Division Advertising Expense Transportation Expense Accounts Receivable Collection Expenso Warehouse Expense 1,002,000 1,204,400 479,000 144,500 120.400 1,164,000 The bases to be used in allocating expenses, together with other essential information, are as follows: A. Advertising expense-incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $216,300; Summer One Dinn The bases to be used in allocating expenses, together with other essential information, are as follows: A. Advertising expense incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $216,300; Summer Sports Division, $262,700 B. Transportation expense-charged back to divisions at a charge rate of $5 per bill of lading: Winter Sports Division, 13,400 bills of lading: Summer Sports Division, 15,500 bills of lading. C. Accounts receivable collection expense incurred at headquarters, charged back to divisions at a charge rate of $5 per invoice: Winter Sports Division, 9,650 salos invoices; Summer Sports Division, 14,430 sales invoices. D. Warehouse expense-charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 91,000 square feet; Summer Sports Division, 103,000 square feet. Required: 1. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Refer to the stor Labels and Amount Descriptions for the exact wording of the answer choices for text entries. "Less" or "Plus" and colons will automatically appear if it is required. Be sure to complete the statement heading. (You may find it useful to work the Supporting Calculations first.) 2. Provide supporting calculations for service department charges. Labels and Amount Descriptions Labels For the Year Ended December 31, 20Y8 For the Month Ended December 31, 2048 Service department charges Amount Descriptions Accounts receivable collection expense Advertising expense Cost of goods sold Divisional administrative expenses Divisional selling expenses Gross profit Income from operations Income from operations before service department charges Sales Total divisional expenses Total service department charges Transportation expense Warehouse expense Labels and Amount Descriptions Labels For the Year Ended December 31, 20Y8 For the Month Ended December 31, 2048 Service department charges Amount Descriptions Accounts receivable collection expense Advertising expense Cost of goods sold Divisional administrative expenses Divisional selling expenses Gross profit Income from operations Income from operations before service department charges Sales Total divisional expenses Total service department charges Transportation expense Warehouse expense GLADES SPORTING GOODS CO. Divisional Income Statements (Label) 1 Winter Sports Division Summer Sports Division 2 3 4 5 6 7 8 (Label) 10 11 14 15 Supporting Calculations 2. Provide supporting calculations for service department charges. Service Department Charges Winter Sports Division Summer Sports Division Total Advertising expense $ Transportation rate per bill of lading $ $ * Number of bills of lading Transportation expense $ $ Accounts receivable collection rate $ $ * Number of sales invoices Accounts receivable collection expenses $ $ Warehouse rate per sq. ft. * Number of square feet $ Warehouse expense $
