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Walton Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. WALTON COMPANY Income Statements
Walton Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated.
WALTON COMPANY | |||
Income Statements for Year 2 | |||
Segment | A | B | C |
---|---|---|---|
Sales | $ 164,000 | $ 240,000 | $ 253,000 |
Cost of goods sold | (130,000) | (80,000) | (90,000) |
Sales commissions | (20,000) | (31,000) | (23,000) |
Contribution margin | 14,000 | 129,000 | 140,000 |
General fixed operating expenses (allocation of presidents salary) | (43,000) | (35,000) | (41,000) |
Advertising expense (specific to individual divisions) | (4,000) | (20,000) | 0 |
Net income (loss) | $ (33,000) | $ 74,000 | $ 99,000 |
Required
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.
Walton Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. Required a. Prepare a schedule of relevant sales and costs for Segment A. o. 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. Prepare a schedule of relevant sales and costs for Segment A. Walton Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. 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. 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
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