Required information [The following information applies to the questions displayed below.) Elegant Decor Company's management is trying to decide whether to eliminate Department 200, which has produced losses or low profits for several years. The company's 2017 departmental income statements shows the following. Combined $ 726,000 478,000 248,000 30,000 9,600 8,200 ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2017 Dept. 100 Dept. 200 Sales $ 438,000 $288,000 Cost of goods sold 267,000 211,000 Gross profit 171,000 77,000 Operating expenses Direct expenses Advertising 17,500 12,500 Store supplies used 5,000 4,600 Depreciation Store 4,800 3,400 equipment Total direct 27,300 20,500 expenses Allocated expenses Sales salaries 78,000 46,800 Rent expense 9,470 4,800 Bad debts expense 9,900 7,600 Office salary 18,720 12,480 Insurance expense 2,100 1,400 Miscellaneous 2,600 2,000 office expenses Total allocated 120,790 75,080 expenses Total expenses 148,090 95,580 Net income (loss) $ 22,910 $(18,580) 47,800 124,800 14,270 17,500 31,200 3,500 4,600 195,870 243,670 $ 4,330 In analyzing whether to eliminate Department 200, management considers the following: a. The company has one office worker who earns $600 per week, or $31,200 per year, and four sales clerks who each earn $600 per week, or $31,200 per year for each salesclerk. b. The full salaries of two salesclerks are charged to Department 100. The full salary of one salesclerk is charged to Department 200. The salary of the fourth clerk, who works half-time in both departments, is divided evenly between the two departments. c. Eliminating Department 200 would avoid the sales salaries and the office salary currently allocated to it. However, management prefers another plan. Two salesclerks have indicated that they will be quitting soon. Management believes that their work can be done by the other two clerks if the one office worker works in sales half-time. Eliminating Department 200 will allow this shift of duties. If this change is implemented, half the office worker's salary would be reported as sales salaries and half would be reported as office salary. d. The store building is rented under a long-term lease that cannot be changed. Therefore, Department 100 will use the space and equipment currently used by Department 200. e. Closing Department 200 will eliminate its expenses for advertising, bad debts, and store supplies; 71% of the insurance expense allocated to it to cover its merchandise inventory; and 21% of the miscellaneous office expenses presently allocated to it. Required: 1. Complete the following report showing total expenses, expenses that would be eliminated by closing Department 200 and the expenses that would continue. The statement should reflect the reassignment of the office worker to one- half time as salesclerk. ELEGANT DECOR COMPANY Analysis of Expenses under Elimination of Department 200 Total EliminatedContinuin Expenses Expenses Expenses Direct expenses Allocated expenses Total expenses