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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
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 $ 160,000 $125,000 $285,000 Cost of goods sold 78,400 22 50e 155, 900 Gross profit 51,680 47,500 129,100 Direct expenses Sales salaries 22,000 7,400 29,400 Advertising 2,000 300 Store supplies used 1,200 550 1,750 Depreciation Equipment 2.000 800 2.500 Total direct expenses 27,200 9,050 36,250 Allocated expenses Rent expense 7.100 4,080 11,180 Utilities expense 2,400 1,500 3,900 Share of office department expenses 12.000 4,500 16,500 Total allocated expenses 21,500 10.000 31,590 Total expenses 48 700 19,230 67,830 Net Income $32,900 $ 28,370 561,270 2,300 Williams plans to open a third department in January 2020 that will sell paintings. Management predicts that the new department will generate $61,000 in sales with a 55% gross profit margin and will require the following direct expenses sales salarles. 56.500 advertising, $1.200, store supplies, 5900; and equipment depreciation $300. 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 $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 9% 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.) dicted 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.) WILLIAMS COMPANY Forecasted Departmental Income Statements For Year Ended December 31, 2020 Clock Mirror Paintings Combined Direct expenses Total direct expenses Allocated expenses Total allocated expenses Total expenses
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