Question
Profit Center Responsibility Reporting XSport Sporting Goods Co. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts
Profit Center Responsibility Reporting
XSport Sporting Goods Co. 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 | $31,920,000 |
SalesSummer Sports Division | 35,264,000 |
Cost of Goods SoldWinter Sports Division | 19,152,000 |
Cost of Goods SoldSummer Sports Division | 20,368,000 |
Sales ExpenseWinter Sports Division | 5,472,000 |
Sales ExpenseSummer Sports Division | 4,864,000 |
Administrative ExpenseWinter Sports Division | 3,192,000 |
Administrative ExpenseSummer Sports Division | 3,131,200 |
Advertising Expense | 1,033,000 |
Transportation Expense | 489,600 |
Accounts Receivable Collection Expense | 248,400 |
Warehouse Expense | 3,040,000 |
The bases to be used in allocating expenses, together with other essential information, are as follows:
- Advertising expenseincurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $485,000; Summer Sports Division, $548,000.
- Transportation expensecharged back to divisions at a charge rate of $17 per bill of lading: Winter Sports Division, 13,700 bills of lading; Summer Sports Division, 15,100 bills of lading.
- Accounts receivable collection expenseincurred at headquarters, charged back to divisions at a charge rate of $9 per invoice: Winter Sports Division, 12,700 sales invoices; Summer Sports Division, 14,900 sales invoices.
- Warehouse expensecharged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 140,000 square feet; Summer Sports Division, 180,000 square feet.
Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.
XSport Sporting Goods Co. | ||
Divisional Income Statements | ||
For the Year Ended December 31, 20Y9 | ||
Winter Sports Division | Summer Sports Division | |
Sales | $fill in the blank 20a082fc8ff7fe5_1 | $fill in the blank 20a082fc8ff7fe5_2 |
Cost of goods sold | fill in the blank 20a082fc8ff7fe5_3 | fill in the blank 20a082fc8ff7fe5_4 |
Gross profit | $fill in the blank 20a082fc8ff7fe5_5 | $fill in the blank 20a082fc8ff7fe5_6 |
Divisional selling and administrative expenses: | ||
Divisional selling expenses | $fill in the blank 20a082fc8ff7fe5_7 | $fill in the blank 20a082fc8ff7fe5_8 |
Divisional administrative expenses | fill in the blank 20a082fc8ff7fe5_9 | fill in the blank 20a082fc8ff7fe5_10 |
Total divisional selling and administrative expenses | $fill in the blank 20a082fc8ff7fe5_11 | $fill in the blank 20a082fc8ff7fe5_12 |
Income from operations before service department charges | $fill in the blank 20a082fc8ff7fe5_13 | $fill in the blank 20a082fc8ff7fe5_14 |
Service department charges: | ||
Advertising expense | $fill in the blank 20a082fc8ff7fe5_15 | $fill in the blank 20a082fc8ff7fe5_16 |
Transportation expense | fill in the blank 20a082fc8ff7fe5_17 | fill in the blank 20a082fc8ff7fe5_18 |
Accounts receivable collection expense | fill in the blank 20a082fc8ff7fe5_19 | fill in the blank 20a082fc8ff7fe5_20 |
Warehouse expense | fill in the blank 20a082fc8ff7fe5_21 | fill in the blank 20a082fc8ff7fe5_22 |
Total service department charges | $fill in the blank 20a082fc8ff7fe5_23 | $fill in the blank 20a082fc8ff7fe5_24 |
Income from operations | $fill in the blank 20a082fc8ff7fe5_25 | $fill in the blank 20a082fc8ff7fe5_26 |
Provide supporting schedules for determining service department charges. If required, round per unit amounts to two decimal places and final answers to the nearest dollar.
XSport Sporting Goods Co. | |||
Service Department Charges | |||
For the Year Ended December 31, 20Y9 | |||
Winter Sports Division | Summer Sports Division | Total | |
Advertising expense | $fill in the blank c1a24ffdd038f8a_1 | $fill in the blank c1a24ffdd038f8a_2 | $fill in the blank c1a24ffdd038f8a_3 |
Transportation rate per bill of lading | $fill in the blank c1a24ffdd038f8a_4 | $fill in the blank c1a24ffdd038f8a_5 | |
Number of bills of lading | fill in the blank c1a24ffdd038f8a_6 | fill in the blank c1a24ffdd038f8a_7 | |
Transportation expense | $fill in the blank c1a24ffdd038f8a_8 | $fill in the blank c1a24ffdd038f8a_9 | $fill in the blank c1a24ffdd038f8a_10 |
Accounts receivable collection rate | $fill in the blank c1a24ffdd038f8a_11 | $fill in the blank c1a24ffdd038f8a_12 | |
Number of sales invoices | fill in the blank c1a24ffdd038f8a_13 | fill in the blank c1a24ffdd038f8a_14 | |
Accounts receivable collection expense | $fill in the blank c1a24ffdd038f8a_15 | $fill in the blank c1a24ffdd038f8a_16 | $fill in the blank c1a24ffdd038f8a_17 |
Warehouse rate per sq. ft. | $fill in the blank c1a24ffdd038f8a_18 | $fill in the blank c1a24ffdd038f8a_19 | |
Number of square feet | fill in the blank c1a24ffdd038f8a_20 | fill in the blank c1a24ffdd038f8a_21 | |
Warehouse expense | $fill in the blank c1a24ffdd038f8a_22 | $fill in the blank c1a24ffdd038f8a_23 | $fill in the blank c1a24ffdd038f8a_24 |
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