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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 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) $ 168,000 $248,000 (126,000) (91,000) (19,000) (24,000) 23,000 133,000 (37,000) (38,000) (5,000) (13,000) $ (19,000) $ 83,000 $256,000 (77,000) (24,000) 155,000 (34,000) 0 $118,000 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 Effect on income 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. WALTON COMPANY VALIUN UFA Comparative Income Statements for the Year 2 Keep Seg. A Eliminate Seg. A Decision Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net Income
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