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, 2049, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales-Winter Sports Division $10,515,000 Sales-Summer Sports Division 13,610,000 Cost of Goods Sold-Winter Sports Division 6,250,000 7,868,000 1,655,000 1,896,000 Cost of Goods Sold-Summer Sports Division Sales expense-Winter Sports Division Sales expense-Summer Sports Division Administrative Expense-Winter Sports Division Administrative Expense-Summer Sports Division Advertising Expense Transportation Expense 1.045,000 1,200,600 476,200 146,500 Accounts Receivable Collection Expense 120,400 Warehouse Expense 980,000 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, $213,200; Summer Sports Division, $263,000. B. Transportation expense-charged back to divisions at a charge rate of $5 per bill of lading: Winter Sports Division, 13,800 bills of lading: Summer Sports Division, 15,500 bills of lading. C. Accounts receivable collection expense-incurred at headquarters, charged back to divisions at a charge rate of $5 per invoice: Winter Sports Division, 9,630 sales invoices: Summer Sports Division, 14,450 sales invoices. D. Warehouse expense-charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 91,000 square feet: Summer Sports Division, 105,000 square feet. 1 Winter Sports Division Summer Sports Division 2 Sales 3 Cost of goods sold 4 Gross profit s Divisional selling and administrative expenses: 6 Divisional selling expenses 7 Divisional administrative expenses Total divisional selling and administrative expenses 9 Income from operations before service departments charges 10 Service department charges: 8 11 Advertising expense 13 12 Transportation expense Accounts receivable collection expense Warehouse expense Total service department charges 14 15 16 Income from operations Service Department Charges Winter Sports Division Summer Sports Division Total 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 $ $
