your previous attempt. Required information [The following information applies to the questions displayed below.] Elegant Decor Company's management is trying to decide whether to eliminate Department 200, which has produced losses or low profits for several years. The company's 2017 departmental income statements shows the following. ELEGANT DECOR COMPANY Departmental Income Statements For Year Ended December 31, 2017 Dept. 100 Sales Cost of goods sold Gross profit $449,000 261,000 188,000 Dept. 200 $282,000 Combined $731,000 209,000 470,000 73,000 261,000 Allocated expenses Sales salaries Operating expenses. Direct expenses Advertising 18,000 14,500 32,500 Store supplies used 4,500 4,000 8,500 Depreciation-Store equipment 4,800 3,700 8,500 Total direct expenses 27,300 22,200 49,500 78,000 46,800 124,800 9,460 4,780 14,240 9,700 7,300 17,000 21,840 14,560 36,400 2,100 1,400 3,500 2,700 2,000 4,700 123,800 76,840 200,640 151,100 99,040 250,140 $ 36,900 $(26,040) $ 10,860 Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses Total allocated expenses Total expenses Net income (loss) In analyzing whether to eliminate Department 200, management considers the following: a. The company has one office worker who earns $700 per week, or $36,400 per year, and four sales clerks who each earn $600 per week, or $31,200 per year for each salesclerk. DEWERDONC ncqucat.com262 This window shows your responses and what was marked correct and incorrect from your previous attempt. Total expenses Net income (loss) 151,100 36,900 99,040 $(26,040) 250.140 $ 10,860 d In analyzing whether to eliminate Department 200, management considers the following: a. The company has one office worker who earns $700 per week, or $36,400 per year, and four sales clerks who each earn $600 per week, or $31,200 per year for each salesclerk. b. The full salaries of two salesclerks are charged to Department 100. The full salary of one salesclerk is charged to Department 200. The salary of the fourth clerk, who works half-time in both departments, is divided evenly between the two departments. c. Eliminating Department 200 would avoid the sales salaries and the office salary currently allocated to it. However, management prefers another plan. Two salesclerks have indicated that they will be quitting soon. Management believes that their work can be done by the other two clerks if the one office worker works in sales half-time. Eliminating Department 200 will allow this shift of duties. If this change is implemented, half the office worker's salary would be reported as sales salaries and half would be reported as office salary. d. The store building is rented under a long-term lease that cannot be changed. Therefore, Department 100 will use the space and equipment currently used by Department 200. e. Closing Department 200 will eliminate its expenses for advertising, bad debts, and store supplies; 75% of the insurance expense allocated to it to cover its merchandise inventory; and 17% of the miscellaneous office expenses presently allocated to it. Required: 1. Complete the following report showing total expenses, expenses that would be eliminated by closing Department 200 and the expenses that would continue. The statement should reflect the teassignment of the office worker to one-half time as salesclerk. ELEGANT DECOR COMPANY Analysis of Expenses under Elimination of Department 200 Total Expenses Eliminated Expenses Continuing Expenses ed space and equipment currently used by Department 200. e. Closing Department 200 will eliminate its expenses for advertising, bad debts, and store supplies; 75% of the insurance expense allocated to it to cover its merchandise inventory; and 17% of the miscellaneous office expenses presently allocated to it. Required: 1. Complete the following report showing total expenses, expenses that would be eliminated by closing Department 200 and the expenses that would continue. The statement should reflect the reassignment of the office worker to one-half time as salesclerk. ELEGANT DECOR COMPANY Analysis of Expenses under Elimination of Department 200 Total Expenses Eliminated Continuing Expenses Expenses $209,000 $209,000 $ 0 Cost of goods sold Direct expenses Advertising 14,500 14,500 0x Store supplies used 4,000 4,000 0 Depreciation-Store 3,700 0 3,700 equipment Allocated expenses Sales salaries Rent expense Bad debts expense Office salary Insurance expense Miscellaneous office expenses Total expenses 46,800 46,800 4,780 47800 7,300 7,300 0 14,560 14,560 0 1,400 1,050 350 2,700 459 2,241 $ 308,740 $ 297,669 S 11,071 000000 MacBook Air