Using the completed Segmented Income Statement and Notes to financial statements (This starts from halfway to bottom of page) fill in and complete the Segmented Income Statement-By Product Line.
The instructions start with the red text of "Required Part A: (25 marks)
Required: Part A: (25 marks) 1) Restate the segmented income statement using the statement the junior accountant prepared and the notes to the financial statements (Chapter 7 Appendix) you are on the right track. If you are not arriving at the check figures, please discuss with your group members to determine where you need to tweak your answer! Ultimately your group will over-write the check figures with formulas, however, it will be your group's responsibility to ensure that you match up the check figures to the original workbook provided. Notes: The percentage column should be taken as a percentage of sales (for example, cost of goods sold for mountain bikes should be taken as a % of mountain bike sales There may be smallrounding differences where total amounts are off by $1, that is ok! Make sure you are using full Excel functionality and entering formulas into each cell. You cannot LISA Vour calculator and innust the final answer Hote from Instructor: Keep cost of goods sold as the first variable expense, Mountain Sports Ltd. then list remaining variable costs alphabetically. Segmented Income Statement-By Product Line For the Year Ended December 31, 2019 Cross Country Ski Packages Mountain Bicycles Accessories Parts and Service TOTAL Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent SALES 677,081 1002 7 39,053 100.0% 381,555 100.0% 136,603 ##### 1,934,292 100.0% Kelly.junior accountant: The sales and cost of goods sold information is correct sol slotted it in the owners confirmed that these were correct), As for the rest...that's up to you! Less: Variable Costs (MUST BE LISTED ALPHABETICALLY) Cost of Goods Sold 276,249 40.821 342,329 46.37 113,513 26,446 19.42 758,537 39.2% Commissions 67,708 10.07 73,905 10.02 38,156 13,660 10.02 193,429 10.02 Parts & Service Expense 36,309 39,633 20,461 0.02 96,403 Rent 16,542 17,781 207 10,631 5,732 207 50,686 2.02 TOTAL 396,808 473,648 182,761 182,761 47.1% 47.12 45,839 21.4% 1,099,055 268,405 36.32 201,794 52.92 107,425 78.6% 860,897 44.5% CONTRIBUTION MARGIN 283,273 41.82 Less: Traceable Fixed Costs (MUST BE LISTED ALPHABETICALLY) Advertising TOTAL Traceable Fixed Costs SEGMENT MARGIN 252.273 224,405 194,794 | | 715,897 Less: Common Fixed Costs (MUST BE LISTED ALPHABETICALLY) TOTAL Common FIC 365,536 statement. I think it's safe to say that I need help! statement. Vehink we ste to say that I need help! Notes Mountain Sports Ltd. Segmented Income Statement For the Year Ended Dec 31, 2019 Cross Country Ski Accessorie Packages Mountain Bikes 5 677,081 739,053 381,555 412 46% 30% 276,249 342,329 113,513 400,832 396,724 268,042 TOTAL 1,934,292|| III- Parts & Service 136,603 1972 26,446) 110,157 758,537 1,175,755 3 Sales Cost of goods sold % Cost of goods sold Gross Profit Operating expenses Advertising 1 Depreciation Property taxes Rent Parts & service expense Salaries & commissions Utilities Total Operating Expenses Operating income (loss) Interest expense Income (Loss) before taxes Income tax Net Income (Loss) 2 3 4 5 6 7 1 5,901 5,868 9,073 18,671 36,309 108,9231 27.193 241,938 158,894 2.250 156,644 29,610 $127,034 49,349 5,868 9,073 18,671 39,633 108,923 27.193| 258,7101 138,014 2,250 135,7641 32,320 $103,444 9,762 5,868 9,073 18,6711 20,461 108,9231 27.193| 199,951 68,091 2,250 6 5,841 16.686 $49,155 7.989| 103,000 5,868 23,473 9,073 36,291 18,671 74,686 0 96,4031 56,000 382,769 27.1931 108.772 124,794 825,394 -14,638 350,361 2,2509 ,000 -16,888 341,361 5,974 84,589 -$22,861 $256.772 8 252 Notes to the financial statements: 1. Advertising is committed to at the beginning of the period by management Management has many different forms of advertising campaigns with different focuses as follows: Cross country ski Mountain bicycles Accessories Parts & Service Promotes TOTAL packages company as al whole $ 31,000 $ 44,000 $ 7,000 $ 7,000 $ 14,000 $ 103,000 2. The company uses the straight-line method of depreciation. 3. The property taxes are set by the City and do not change with changes in sales volume. 3,000 4. Rent has two components: Monthly amount Percentage based on each department's sales 22 5. Parts and services expense varies with sales of cross country skis, mountain bikes, and accessories. There are no parts & service expense for the parts & service department 6. Sales commissions are paid on sales for cross country skis, mountain bikes, and accessories. The Parts & Service department employees do not earn sales commissions on their sales. 102 Sales commissions Total yearly salary of employees that sell skis, bikes, and accessories. These employees will continue to work for the company regardless of which product lines are offered. $ 67,000 $ 80.000 The store managers are paid a total yearly salary. They are responsible for all of the departments. These managers will continue to work even if any of the divisions are closed The Parts & Service Employees only work in that department. If this department were closed, the technicians would be laid off. The total salary for the technicians is $ 56,000 7. Utilities are the same regardless of activity and will not change even if a product line is dropped. 8. Interest expense is charged on the outstanding bank loans. The total interest expense $ 9,000 9. Income taxes are calculated for the company as a whole. The company will have to pay taxes regardless of which product lines it offers. Required: Part A: (25 marks) 1) Restate the segmented income statement using the statement the junior accountant prepared and the notes to the financial statements (Chapter 7 Appendix) you are on the right track. If you are not arriving at the check figures, please discuss with your group members to determine where you need to tweak your answer! Ultimately your group will over-write the check figures with formulas, however, it will be your group's responsibility to ensure that you match up the check figures to the original workbook provided. Notes: The percentage column should be taken as a percentage of sales (for example, cost of goods sold for mountain bikes should be taken as a % of mountain bike sales There may be smallrounding differences where total amounts are off by $1, that is ok! Make sure you are using full Excel functionality and entering formulas into each cell. You cannot LISA Vour calculator and innust the final answer Hote from Instructor: Keep cost of goods sold as the first variable expense, Mountain Sports Ltd. then list remaining variable costs alphabetically. Segmented Income Statement-By Product Line For the Year Ended December 31, 2019 Cross Country Ski Packages Mountain Bicycles Accessories Parts and Service TOTAL Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent SALES 677,081 1002 7 39,053 100.0% 381,555 100.0% 136,603 ##### 1,934,292 100.0% Kelly.junior accountant: The sales and cost of goods sold information is correct sol slotted it in the owners confirmed that these were correct), As for the rest...that's up to you! Less: Variable Costs (MUST BE LISTED ALPHABETICALLY) Cost of Goods Sold 276,249 40.821 342,329 46.37 113,513 26,446 19.42 758,537 39.2% Commissions 67,708 10.07 73,905 10.02 38,156 13,660 10.02 193,429 10.02 Parts & Service Expense 36,309 39,633 20,461 0.02 96,403 Rent 16,542 17,781 207 10,631 5,732 207 50,686 2.02 TOTAL 396,808 473,648 182,761 182,761 47.1% 47.12 45,839 21.4% 1,099,055 268,405 36.32 201,794 52.92 107,425 78.6% 860,897 44.5% CONTRIBUTION MARGIN 283,273 41.82 Less: Traceable Fixed Costs (MUST BE LISTED ALPHABETICALLY) Advertising TOTAL Traceable Fixed Costs SEGMENT MARGIN 252.273 224,405 194,794 | | 715,897 Less: Common Fixed Costs (MUST BE LISTED ALPHABETICALLY) TOTAL Common FIC 365,536 statement. I think it's safe to say that I need help! statement. Vehink we ste to say that I need help! Notes Mountain Sports Ltd. Segmented Income Statement For the Year Ended Dec 31, 2019 Cross Country Ski Accessorie Packages Mountain Bikes 5 677,081 739,053 381,555 412 46% 30% 276,249 342,329 113,513 400,832 396,724 268,042 TOTAL 1,934,292|| III- Parts & Service 136,603 1972 26,446) 110,157 758,537 1,175,755 3 Sales Cost of goods sold % Cost of goods sold Gross Profit Operating expenses Advertising 1 Depreciation Property taxes Rent Parts & service expense Salaries & commissions Utilities Total Operating Expenses Operating income (loss) Interest expense Income (Loss) before taxes Income tax Net Income (Loss) 2 3 4 5 6 7 1 5,901 5,868 9,073 18,671 36,309 108,9231 27.193 241,938 158,894 2.250 156,644 29,610 $127,034 49,349 5,868 9,073 18,671 39,633 108,923 27.193| 258,7101 138,014 2,250 135,7641 32,320 $103,444 9,762 5,868 9,073 18,6711 20,461 108,9231 27.193| 199,951 68,091 2,250 6 5,841 16.686 $49,155 7.989| 103,000 5,868 23,473 9,073 36,291 18,671 74,686 0 96,4031 56,000 382,769 27.1931 108.772 124,794 825,394 -14,638 350,361 2,2509 ,000 -16,888 341,361 5,974 84,589 -$22,861 $256.772 8 252 Notes to the financial statements: 1. Advertising is committed to at the beginning of the period by management Management has many different forms of advertising campaigns with different focuses as follows: Cross country ski Mountain bicycles Accessories Parts & Service Promotes TOTAL packages company as al whole $ 31,000 $ 44,000 $ 7,000 $ 7,000 $ 14,000 $ 103,000 2. The company uses the straight-line method of depreciation. 3. The property taxes are set by the City and do not change with changes in sales volume. 3,000 4. Rent has two components: Monthly amount Percentage based on each department's sales 22 5. Parts and services expense varies with sales of cross country skis, mountain bikes, and accessories. There are no parts & service expense for the parts & service department 6. Sales commissions are paid on sales for cross country skis, mountain bikes, and accessories. The Parts & Service department employees do not earn sales commissions on their sales. 102 Sales commissions Total yearly salary of employees that sell skis, bikes, and accessories. These employees will continue to work for the company regardless of which product lines are offered. $ 67,000 $ 80.000 The store managers are paid a total yearly salary. They are responsible for all of the departments. These managers will continue to work even if any of the divisions are closed The Parts & Service Employees only work in that department. If this department were closed, the technicians would be laid off. The total salary for the technicians is $ 56,000 7. Utilities are the same regardless of activity and will not change even if a product line is dropped. 8. Interest expense is charged on the outstanding bank loans. The total interest expense $ 9,000 9. Income taxes are calculated for the company as a whole. The company will have to pay taxes regardless of which product lines it offers
