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Williams Company began operations in January 2 0 1 9 with two operating ( selling ) departments and one service ( office ) department. its
Williams Company began operations in January with two operating selling departments and one service office department. its
departmental income statements follow.
Willams plans to open a third department in January that will sell paintings, Management predicts that the new department will
generate $ in sales with a gross profit margin and will require the following direct expenses: sales salaries, $;
advertising, $; store supplies, $; and equipment depreciation, $ It will fit the new department into the current rented space
by taking some square footage from the other two departments. When opened, the new Painting department will fill onefifth of the
space presently used by the Clock department and onefourth used by the Mirror department. Management does not predict any
increase in utilities costs, which are allocated to the departments in proportion to occupied space or rent expense The company
allocates office department expenses to the operating departments in proportion to their sales. It expects the Painting department to
increase total office department expenses by $ Since the Painting department will bring new customers into the store,
management expects sales in both the Clock and Mirror departments to increase by No changes for those departments' gross
profit percents or their direct expenses are expected except for store supplies used, which will increase in proportion to sales.
Required:
Prepare departmental income statements that show the company's predicted results of operations for calendaryear for the
three operating selling departments and their combined totals. Do not round intermediate calculations. Round your final answers
to neorest whole dollar omount.
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