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. Dept. 200 $284,000 215,000 69,000 Combined $733,000 479,000 254,000 ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2017 Dept. 100 Sales $449,000 Cost of goods sold 264,000 Gross profit 185,000 Operating expenses Direct expenses Advertising 15,000 Store supplies used 4,500 Depreciation-store equipment 4,600 Total direct expenses 24,100 Allocated expenses Sales salaries 52,000 Rent expense 9,440 Bad debts expense 9,800 Office salary 15,600 Insurance expense 2,100 Miscellaneous office expenses 2,100 Total allocated expenses 91,040 Total expenses 115, 140 Net income (loss) $ 69,860 11,500 4,000 3,400 18,900 26,500 8,500 8,000 43,000 31,200 4,730 7,500 10,400 1,200 1,400 56,430 75,330 $ (6,330) 83,200 14,170 17,300 26,000 3,300 3,500 147,470 190, 470 $ 63,530 In analyzing whether to eliminate Department 200, management considers the following: a. The company has one office worker who earns $500 per week, or $26,000 per year, and four sales clerks who each earn $400 per week, or $20,800 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 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; 67% of the insurance expense allocated to it to cover its merchandise inventory, and 24% 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 Eliminated Continuing Expenses Expenses Direct expenses Allocated expenses Total expenses