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 departmental income statements show the following. Dept. 200 $289,000 209,000 80,000 Combined $ 733,000 469,000 264,000 ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2019 Dept. 100 Sales $444,000 Cost of goods sold 260,000 Gross profit 184,000 Operating expenses Direct expenses Advertising 17,500 Store supplies used 4,500 Depreciation Store equipment 4,800 Total direct expenses 26,800 Allocated oxpenses Sales salaries 65,000 Rent expense 9,440 Bad debts expense 9,500 Office salary 15,600 Insurance expense 1,900 Miscellaneous office expenses 2,500 Total allocated expenses 103,940 Total expenses 130,740 Net income (loss) $ 53,260 13,000 4,200 3,500 20,700 30,500 8,700 8,300 47,500 39,000 4,780 7,100 10,400 1,100 1,800 64,180 84,880 $ (4,880) 104,000 14,220 16,600 26,000 3,000 4,300 168, 120 215,620 $ 48,380 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 Expenses Cost of goods sold Direct expenses Advertising Store supplies used Depreciation Store equipment Allocated expenses Sales salaries Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses S 0 $ 0 $ 0 Total expenses a. The company has one office worker who earns $500 per week, or $26,000 per year, and four salesclerks who each earns $500 per week, or $26.000 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 soles 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, 65% of the insurance expense allocated to it to cover its merchandise inventory, and 19% of the miscellaneous office expenses presently allocated to it