Williams Company began operations in January 2019 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, 2019 Clock Mirror Combined Sales $ 170,000 $ 85,000 $255,000 Cost of goods sold 83,300 52,700 136,000 Gross profit 86,700 32,300 119,000 Direct expenses Sales salaries 21,000 7,900 28,900 Advertising 1,900 900 2,800 Store supplies used 1,150 300 1,450 Depreciation-Equipment 2,500 800 3,300 Total direct expenses 26,550 9,900 36, 450 Allocated expenses Rent expense 7,110 3,900 11,010 Utilities expense 3,200 1,700 4,900 Share of office department expenses 10,500 9,500 20,000 Total allocated expenses 20,810 15,100 35, 910 Total expenses 47, 360 25,000 72,360 Net income $ 39, 340 $ 7,300 $ 46,640 Williams plans to open a third department in January 2020 that will sell paintings. Management predicts that the new department will generate $60,000 in sales with a 65% gross profit margin and will require the following direct expenses: sales salaries, $8,000; advertising, $1,000, store supplies, $400; and equipment depreciation, $600. 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 $8,000. Since the Painting department will bring new customers into the store, management expects sales in both the Clock and Mirror departments to increase by 14%. 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 2020 for the three operating (selling) departments and their combined totals. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) ILICA WIGIL Norra aluun) X Answer is not complete. Combined WILLIAMS COMPANY Forecasted Departmental Income Statements For Year Ended December 31, 2020 Clock Mirror Paintings Sales $ 170,000 $ 85,000 $ 60,000 Cost of goods sold Gross profit 170,000 85,000 60,000 Direct expenses Sales salaries 21,000 7,900 8,000 Advertising 1,900 900 2,800 X Store supplies used 1,150 x 300 400 Depreciation of equipment 2,500 800 600 Total direct expenses 26,550 9,900 11,800 Allocated expenses Rent expense 7,110 % 3,900 X Utilities expense 3,200 1,700 X Share of office dept. expenses 10,500 x 9,500 Total allocated expenses 20,810 15,100 0 Total expenses 47,360 25,000 11,800 Net income $ 122,640 $ 60,000 $ 48,200 36,900 2,800 x 1,450 X 3,900 45,050 11,010 4,900 20,000 35,910 80,960 (80,960) $