1. The following is a partially completed lower section of a departmental expense allocation for Cozy Bookstore. It reports the total amounts of direct and indirect expenses allocated to its five (5) departments. Allocate the expenses of the two service departments (advertising and purchasing) to the three operating departments and provide the complete income statement.

\fAllocation of Expenses to Departments Expense Advertising Purchasing Books Magazines Newspapers Allocation Base Account Bal. Dept. Dept. Dept. Dept. Dept. Total department expenses.. $698,000 $24,000 $34,000 $425,000 $90,000 $125,000 Service department expenses Advertising department.. Sales Purchasing department.. Purchorders ? ? Total expenses allocated to operating departments. ? $ 0