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 $ 150,000 $115,000 $265,000 Cost of goods sold 73,500 71,300 144,800 Gross profit 76,500 43,700 120,200 Direct expenses Sales salaries 22,000 7,100 29, 100 Advertising 1,600 800 2,400 Store supplies used 750 250 1,000 Depreciation-Equipment 1,600 900 2,500 Total direct expenses 25,950 9,050 35,000 Allocated expenses Rent expense 7,070 3,840 10,910 Utilities expense 2,800 1,900 4,700 Share of office department expenses 13,000 9,500 22,500 Total allocated expenses 22,870 15, 240 38, 110 Total expenses 48,820 24,290 73, 110 Net income $ 27,680 $ 19,410 $ 47,090 Williams plans to open a third department in January 2020 that will sell paintings. Management predicts that the new department will generate $51,000 in sales with a 65% gross profit margin and will require the following direct expenses: sales salaries, $7,500; advertising, $900; store supplies, $900; and equipment depreciation, $1,000. 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 $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 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 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.) X Answer is complete but not entirely correct. WILLIAMS COMPANY Forecasted Departmental Income Statements For Year Ended December 31, 2020 Clock Mirror Paintings $ 163,500 X $ 103,550 X $ 51,000 80,115 X 64,201 X 17,850 83,385 39,349 33,150 Combined Sales $ 318,050 X 162,166 X 155,884 7,000 X Cost of goods sold Gross profit Direct expenses Sales salaries Advertising Store supplies used Depreciation of equipment Total direct expenses Allocated expenses 20,000 X 1,200 9,000 X 1,100 X 500 X 972 X 432 X 900 36,000 X 2,800 2,304 X 2,400 X 43,504 300 600 1,500 23,672 8,232 11,600 Rent expense Utilities expense Share of office dept. expenses Total allocated expenses 5,688 2,141 X 12,955 X 20,784 44,456 38,929 $ 2,835 1,067 X 8,205 X 12,107 20,339 19,010 $ 2,367 891 X 4,041 X 7,299 18,899 14,251 $ 10,890 4,100 25,200 X 40,190 83,694 72,190 Total expenses Net income $