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 show the following ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2017 Dept. 100 Dept. 200 Combined $436,000 $290,000 $726,000 262,000 257,000 Sales 174,000 469,000 83,000 Cost of goods sold Gross profit Operating expenses Direct expenses Advertising Store supplies used 17,000 4,000 5,000 26,000 12,000 3,800 3,300 19,100 29,000 7,800 8,300 45,100 Depreciation-Store equipment Total direct expenses Allocated expenses Sales salaries 65,000 9,440 9,900 18,720 2,000 2,400 39,000 4,720 8,100 12,480 1,100 1,600 67,000 104,000 14,160 18,000 31,200 3,100 Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses 4,000 174,460 219,560 Total allocated expenses 107,460 133,460 86,100 Total expenses 40,540 (3,100) 37,440 Net income (loss) In analyzing whether to eliminate Department 200, management considers the following 0 de ed tn- 9 bke ad . pad b aye 9 aeeca d asb ncfs htn ea avc dseen oltes SC soi eeea nobee reaf uadIr c2e orsa il qa OS st vnd erep 2. Prepare a forecasted annual income statement for the company reflecting the elimination of Department 200 assuming that it will not affect Department 100's sales and gross profit. The statement should reflect the reassignment of the office worker to one-half time as a salesclerk ELEGANT DECOR COMPANY Forecasted Annual Income Statement Under Plan to Eliminate Department 200 0 Operating expenses otal operating expenses 0 Analysis Component 3. Reconcile the company's combined net income with the forecasted net income assuming that Department 200 is eliminated (list both items and amounts). (Amounts to be deducted should be indicated by a minus sign.) ELEGANT DECOR COMPANY Reconciliation of Combined Income with Forecasted Income Combined net income Forecasted net income