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 Statements For Year Ended December 31, 2017 clock Mirror Combined Sales $ 140,000 $ 85,000 $225,000 Cost of goods sold 68,600 52,700 121,300 Gross profit 71,400 32,300 103,700 Direct expenses Sales salaries 21,500 7,700 29,200 Advertising 1,100 900 2,000 Store supplies used 600 1,550 Depreciation Equipment 2,100 800 2,900 Total direct expenses 25,650 10,000 35,650 Allocated expenses Rent expense 7,050 3,840 10,890 Utilities expense 2,900 2,500 5,400 Share of office department expenses 13,500 6,500 20,000 Total allocated expenses 23,450 12,840 36,290 Total expenses 49,100 22,840 71,940 Net income $ 22,300 $ 9,460 $ 31,760 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 85% gross profit margin and will require the following direct expenses: sales salaries, $7,500; advertising. $700; store supplies, $600, 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 for 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 $7,400. Since the painting department will bring new customers into the store, management expects sales in both the clock and mirror departments to increase by 12%. 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.) WILLIAMS COMPANY Forecasted Departmental Income Statements For Year Ended December 31, 2018 Clock Mirror Paintings Sales $ 156,000 $ 95,200 $ 52,000 Cost of goods sold 76,440 58,348 7 ,800 Gross profit 79,560 36,852 4 4,200 Direct expenses Sales salaries 32,9961 8,611 7,500 Advertising 1,1001 9001 700 Store supplies used 1,064 672 600 | Depreciation of equipment 2,340 895 900 Total direct expenses 37,500 11,078 9,700 Combined $ 303,200 142,588 160,612 40,061 2,700 2,336 4,135 49,232 Combined $ 303,200 142,588 160,612 WILLIAMS COMPANY Forecasted Departmental Income Statements For Year Ended December 31, 2018 Clock Mirror Paintings Sales $ 156,000f $ 95,200 $ 52,000 Cost of goods sold 76,4401 58,348 7,800 Gross profit 79,560 36,852 44.2001 Direct expenses Sales salaries 32,996 8,6111 7,500 Advertising 1,100 900 7001 Store supplies used 1,064 6721 600 Depreciation of equipment 2,340 8 95 900 Total direct expenses 37,500 11,078 9,700 Allocated expenses Rent expense 5,6401 2,880 2,370 Utilities expense 2,3101 1,8751 930 Share of office dept. expenses 15,0421 7,280 7,400 Total allocated expenses 22,992 1 2,035 10,700 Total expenses 60,492 23.113 20,400 (Net income $ 19,068 $ 13,739 $ 23,8001 40,061 2,700 2,336 4,135 49,232 10,890 5.115 29,722 45,727 94,959 65.653