Williams Company began operations in January 2017 with two operating (selling) departments and one service (office) department. Its departmental income statements follow WILLIAMS COMPANY Departmental Income Stateents For Year Ended December 31, 2017 k Mirror Combined 160,000 $115,000 275,000 78,40071,300 149, 700 81,600 43,700 125,300 Clock Sales Cost of goods sold Gross profit Direct expenses Sales salaries Advertising Store supplies used Depreciation-Equipment Total direct expenses 22,500 1,400 500 1,500 25,900 8,700 600 500 200 10,000 31,200 2,000 1,000 1,700 35,900 Allocated expenses Rent expense Utilities expense Share of office department expenses Total allocated expenses 10,720 5,500 21,000 37,220 73,120 $ 34,580 17,600 52,180 7,120 3,000 11,000 21,120 47,020 3, 600 2,500 10,000 16,100 26,100 Total expenses Net income Williams plans to open a third department in January 2018 that will sell paintings. Management predicts that the new department will generate $52,000 in sales with a 75% gross profit margin and will require the following direct expenses: sales salaries, $6,500; advertising, $700; store supplies, $400; and equipment depreciation, $900. 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 one-fifth of the space presently used by the clock department and one-fourth 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 $8,400. Since the painting department will bring new customers into the store, management expects sales in both the clock and mirror departments to increase by 11%. 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 calendar-year 2018 for the three operating (selling) departments and their combined totals. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) Answer is not complete WILLIAMS COMPANY Forecasted Departmental Income Statements For Year Ended December 31, 2018 Paintings Combined $ 177,600 $27,650 52,000 357 250 8702479,143 13,0179,167 178,083 Clock Mirror Sales Cost of goods sold Gross profit Direct expenses 90,576 48,507 39,000 22,500 ,400 8,700 Sales salaries Advertising Store supplies used Depreciation of equipment Total direct expenses 6,37,700 2,700 1,510 2,600 44,510 600 700 400 900 1,500 200 25,955 10,055 8,500 Allocated expenses Rent expense Utilities expense Share of office dept. 5,696 2,905 2,700 1,674 2,32410,720 1,743 ex nses 8,601 34,556 Total allocated expenses 10,720 55,230 $ 56,020 34,078 26,433 122,853 4,374 14,429 4,067 12,567 Total expenses Net income
