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Thornton Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. THORNTON COMPANY Income Statements

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Thornton Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. THORNTON COMPANY Income Statements for the Year 2018 Segment sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's Advertising expense (specific to individual divisions) Net income $ 171,000 (126,000) (19,000). 26,000 (42,000) (4,000). $ (20,000) $236,000 (92,000) (25,000) 119,000 (52,000) (20,000). $ 47,000 $245,000 (90,000) (23,000) 132,000 (36,000) 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 Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Elect on income Required B > Thornton Company operates three segments. Income statements for the segments imply that profitability could be improved If Segment A were eliminated. THORNTON COMPANY Income Statements for the Year 2018 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 $ 171,000 $236,000 (126,000) (92,000) _(19,000). (25,000) 26,000 119,000 (42,000) (52,000) (4,000). (20,000) $ (20,000) $ 47,000 $245,000 (90,000) (23,000) 132,000 (36,000) 0 $ 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 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. THORNTON COMPANY Comparative Income Statements for the Year 2018 Decision Keep Seg. A Eliminate Seg. A Sales Cost of goods sold Sales commissions Contribution margin $ 0 $ Generalfoed operating expenses Advertising expense Net Income $ 0 $ 0 Required A

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