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, 2019ClockMirrorCombinedSales$220,000

$100,000$320,000Cost of goods sold107,80062,000169,800Gross profit112,20038,000150,200Direct expensesSales salaries20,9007,00027,900Advertising1,3809502,330Store supplies used1,3508502,200DepreciationEquipment1,6807502,430Total direct expenses25,3109,55034,860Allocated expensesRent expense7,0203,78010,800Utilities expense8,4504,55013,000Share of office department expenses10,5004,50015,000Total allocated expenses25,97012,83038,800Total expenses51,28022,38073,660Net income$60,920$15,620$76,540

Williams plans to open a third department in January 2020 that will sell paintings. Management predicts that the new department will generate $77,000 in sales with a 55% gross profit margin and will require the following direct expenses: sales salaries, $8,900; advertising, $1,250; store supplies, $950; and equipment depreciation, $650. 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 $25,000. Since the Painting department will bring new customers into the store, management expects sales in both the Clock and Mirror departments to increase by 8%. 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.