Williams Company began operations in January 2019 with two operating (selling) departments and one service office) department. Its departmental income statements follow. Mirror Combined 77,500 $ 252,500 48,050 133,800 29,450 118,700 WILLIAMS COMPANY Departmental Income Statements For Year Ended December 31, 2019 Clock Sales $ 175,000 $ Cost of goods sold 85,750 Gross profit 89, 250 Direct expenses Sales salaries 20,450 Advertising 1,290 Store supplies used 1,125 Depreciation-Equipment 1,590 Total direct expenses 24,455 Allocated expenses Rent expense 7,020 Utilities expense 5,525 Share of office department expenses 10,500 Total allocated expenses 23,045 Total expenses 47,500 Net income $ 41,750 $ 7,000 725 625 525 27,450 2,015 1,750 2,115 33,330 8,875 3,780 2,975 4,500 11,255 20, 130 9,320 10,800 8,500 15,000 34,300 67,630 51,070 Williams plans to open a third department in January 2020 that will sell paintings. Management predicts that the new department will generate $63,500 in sales with a 55% gross profit margin and will require the following direct expenses: sales salaries, $8,450; advertising, $1,025; store supplies, $725; and equipment depreciation, $425. 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 $16,000. 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. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) 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.) Answer is not complete. WILLIAMS COMPANY Forecasted Departmental Income Statements For Year Ended December 31, 2020 Clock Mirror Paintings Combined Sales $ 175,000 X $ 77,500 X $ 63,500 $ 316.000 x Cost of goods sold 85,750 X 48,050 X 34.925 % 168,725 X Gross profit 89,250 29,450 28,575 147,275 Direct expenses Sales salaries 20,450 7,000 8,450 35,900 Advertising 1,290 725 1,025 3,040 Store supplies used 1,125 X 625 X 725 2,475 X Depreciation of equipment 1,590 525 425 2,540 Total direct expenses 24,455 8,875 10,625 43,955 Allocated expenses Rent expense 7,020 X 3,780 X 0 x Utilities expense 5.525 X 2,975 X 0 X Share of office dept. expenses 10,500 X 4,500 X Total allocated expenses 23,045 11,255 0 0 Total expenses 47,500 20,130 10,625 43,955 Net income $ 41.750 $ 9,320 $ 17,950 $ 103,320