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	$	195,000		$	87,500		$	282,500
Cost of goods sold		95,550			54,250			149,800
Gross profit		99,450			33,250			132,700
Direct expenses
Sales salaries		20,650			7,000			27,650
Advertising		1,330			825			2,155
Store supplies used		1,225			725			1,950
DepreciationEquipment		1,630			625			2,255
Total direct expenses		24,835			9,175			34,010
Allocated expenses
Rent expense		7,020			3,780			10,800
Utilities expense		6,825			3,675			10,500
Share of office department expenses		10,500			4,500			15,000
Total allocated expenses		24,345			11,955			36,300
Total expenses		49,180			21,130			70,310
Net income	$	50,270		$	12,120		$	62,390

Williams plans to open a third department in January 2020 that will sell paintings. Management predicts that the new department will generate $69,500 in sales with a 55% gross profit margin and will require the following direct expenses: sales salaries, $8,650; advertising, $1,125; store supplies, $825; and equipment depreciation, $525. 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 $20,000. 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 companys 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.)

Combined $ 352,000 181,075 170,925 >> Forecasted Departmental Income Statements For Year Ended December 31, 2020 Clock Mirror Paintings Sales $ 195,000 X $ 87,500 X $ 69,500 Cost of goods sold 95,550 54,250 X 31,275 Gross profit 99,450 33,250 38,225 Direct expenses Sales salaries 20,650 7,000 8,650 Advertising 1,330 825 1,125 Store supplies used 1,225 X 725 X 825 Depreciation of equipment 1,630 625 525 Total direct expenses 24,835 9,175 11,125 Allocated expenses Rent expense 7,020 3,780 Utilities expense Share of office dept. expenses Total allocated expenses 7,020 3,780 0 Total expenses 31,855 12,955 11.125 $ 67,595 $ 20,295 $ 27,100 SO 36,300 3,280 2,775 2,780 45,135 > 0 45,135 125,790 $