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Solomon Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. SOLOMON COMPANY Income Statements
Solomon Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. SOLOMON COMPANY Income Statements for Year 2 Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) B $ 165,000 $243,000 (127,000) (85,000) (19,000) (25,000) 19,000 133,000 (37,000) (38,000) (4,000) (19,000) $ (22,000) $ 76,000 $246,000 (89,000) (27,000) 130,000 (34,000) $ 96,000 Required a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Complete this question by entering your answers in the tabs below. Required A Required B a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Sales Effect on income $ 0 Required Required B a. Prepare a schedule of relevant sales and costs for Segment A. - Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Complete this question by entering your answers in the tabs below. Required A Required B Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. SOLOMON COMPANY Comparative Income Statements for the Year 2 Decision Keep Seg. A Eliminate Seg. A Sales Cost of goods sold Sales commissions Contribution margin $ 0 $ General fixed operating expenses Advertising expense Net Income $ 0 $ 0 0 DomLA
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