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 triai balance as of December 31,20r, 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 essental information, are as follows A. Advertsing expense-incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $217,100; Summer Sports Division, $260,600 8. Transportabon expense-charged back to divisions at a charge rate of $8 per bill of lading: Winter Sports Division, 12,300 bills of lading: Summer Sports Division, 15, 300 bills of lading C. Accounts receivable collectson expense-incurred at headquarters, charged back to divisions at a charge rate of $5 por invoice: Winter Sports Division, 9,680 sales involices; Summer Sports Division, 14,500 sales invoices. D. Warehouse expense - charged back to divisions on the basis of floor space used in stoning division products. Witer Sports Division, 92,000 square feet Summer Sports Division, 102,000 square feet. Required: 1. Prepare a divisional income statement with nvo column headings Winter Sports Divsion and Summer Spors Divsion. Reler to the bst of Labets and Amount Descripoions tor the exact wording of the answer chouces thr next entries. (Complete the Supporang Catculatons rab arat) A colon Q will nu in where needed 2 Provide supporang calculabons for semice deparenent charges. The bases to be used in allocating expenses, together with other essental information, are as follows A. Advertsing expense-incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $217,100; Summer Sports Division, $260,600 8. Transportabon expense-charged back to divisions at a charge rate of $8 per bill of lading: Winter Sports Division, 12,300 bills of lading: Summer Sports Division, 15, 300 bills of lading C. Accounts receivable collectson expense-incurred at headquarters, charged back to divisions at a charge rate of $5 por invoice: Winter Sports Division, 9,680 sales involices; Summer Sports Division, 14,500 sales invoices. D. Warehouse expense - charged back to divisions on the basis of floor space used in stoning division products. Witer Sports Division, 92,000 square feet Summer Sports Division, 102,000 square feet. Required: 1. Prepare a divisional income statement with nvo column headings Winter Sports Divsion and Summer Spors Divsion. Reler to the bst of Labets and Amount Descripoions tor the exact wording of the answer chouces thr next entries. (Complete the Supporang Catculatons rab arat) A colon Q will nu in where needed 2 Provide supporang calculabons for semice deparenent charges. Labels and Amount Descriptions Divisional Income Statements tivisional Income Statements Shaded cellis have feedb XSport Sporting Goods Co. Score: 92/168 Divisional income Statements For the Year Ended December 31, 20Y9 Winter Sports 1 Surmer Sports Dirision millhill Division 2 Sales 3. Cost of goods sold 4. Gross profit 4. Divisional selling and administrative expenses. Divisional adininistrative expenses V. $1,018,00000 V 1 Divisional selling expenses 1,665,000,00K Print ltem rit center responsibility reporting Instructio nstructions Labels and Amount Descriptions Divisional Income Statements Divisional Income Statements 6. Divisional administrative expenses. 10 Service department charges: 11 Transportation expense 12 Advertising expense 33 Accounts receivable collection expense 14 Warehouse expense is Total service department charges 36. Income from operations. Supporting Calculations Advertising expense Transportation rate per bill of lading Number of bills of lading Transportation expense Accounts receivable collection rate Number of sales invoices Accounts recelvable collection expense Warehouse rate per sq. It. Number of square feet Warehouse expense
