XSport Sporting Goods Co. Divisional Income Statements For the Year Ended December 31, 20 Y9 Sales Cost of goods sold Gross profit Divisional selling and administrative expenses: Divisional selling expenses Divisional administrative expenses Total divisional selling and administrative expenses Income from operations before service department charges Service department charges: Advertising expense Transportation expense Accounts receivable collection expense Warehouse expense Total service department charges Income from operations Xsport Sporting Goods Co. Service Department Charges For the Year Ended December 31, 20 Y9 Advertising expense Transportation rate per bill of lading Number of bills of lading Transportation expense Accounts receivable collection rate Number of sales invoices Accounts receivable collection expense Warehouse rate per sq. ft. Number of square feet Warehouse expense XSport Sporting Goods Co. operates two divisions-the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31,20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: The bases to be used in allocating expenses, together with other essential information, are as follows: a. Advertising expense-incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $485,000; Summer Sports Division, $548,000. b. Transportation expense-charged back to divisions at a charge rate of $13 per bill of lading: Winter Sports Division, 15,100 bills of lading; Summer Sports Division, 16,600 bills of lading. c. Accounts receivable collection expense-incurred at headquarters, charged back to divisions at a charge rate of $7 per invoice: Winter Sports Division, 14,000 sales invoices; Summer Sports Division, 16,400 sales invoices. d. Warehouse expense-charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 170,000 square feet; Summer Sports Division, 210,000 square feet