ll uepartment? P1-3B. Departmental Income Statement The following information wa

Question

ll uepartment? P1-3B. Departmental Income Statement The following information was obtained from the ledger of LO4 Stillwell Emporium, Inc., at the end of 2016: STILLWELL EMPORIUM, INC. Trial Balance December 31, 2016 Debit Credit Cash $ 18,000 70,000 45,000 97,000 Inventory, December 31, 2016 Equipment and fixtures (net) . … Accounts payable. Common stock. Retained earnings Sales-department a Sales-department Cost of goods sold-department a Cost of goods sold-department b... s 34,000 120,000 30,000 360,000 140,000 Sales salaries expense Advertising expense Insurance expense (on merchandise).... Uncollectible accounts expense.... Occupancy expense. Office and other administrative expense. … 216,000 70,000 74,000 31,000 10,000 3,000 16,000 34,000 $684,000 $684,000 Stillwell analyzes its operating expenses at the end of each period in order to prepare an income statement that will exhibit departmental contribution to common expenses. From payroll records, ad vertising copy, and other records, the following tabulation was obtained: Traceable Expense Common Dept. A Dept. B Expense .$48,000 $20,000 $6,000 Sales salaries expense. . Advertising expense. Insurance expense 15,000 6,000 10,000 8,000 2,000 16,000 Uncollectible accounts expense Office and other administrative expense...... .2.000 1,000 9,000 17,000 8,000 Required a departmental income statement for Stillwell Emporium, Inc., showing mon expenses, assuming an overall income tax rate of 30%

Explanation / Answer

INCOME STATEMENT of STILLWELL EMPORIUM INC. FOR THE YEAR ENDED DECEMBER 31, 2016 Department A Department B Sales revenue 360000 140000 Net sales revenue 360000 140000 Cost of goods sold 216000 70000 Gross profit 144000 70000 Selling expenses Sales salaries and commissions 48000 20000 Advertising expense 15000 6000 Administrative expenses Uncollectible accounts expenses 2000 1000 Office and administrative 17000 9000 Insurance expense 8000 2000 90000 38000 Departmental Income from operations 54000 32000 Departmental Contribution for common expenses 86000 Common Expenses 40000 Net Income From Operations 46000 Income Tax@30% 13800 Net income for the year 32200

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