Question

Departmental Income Statement

The following information was obtained from the ledger of Stillwell Emporium, Inc., at the end of 2016

Stillwell Emporium, Inc. Trial Balance December 31, 2016
				Debit	Credit
Cash				$19,000
Accounts receivable (net)				70,000
Inventory, December 31, 2016				45,000
Equipment and fixtures (net)				97,000
Accounts payable					$34,000
Common stock					120,000
Retained earnings					30,000
Revenue - department a					367,000
Revenue - department b					143,000
Cost of goods sold - department a				216,000
Cost of goods sold - department b				70,000
Sales salaries expense				77,000
Advertising expense				34,000
Insurance expense (on merchandise)				10,000
Uncollectible accounts expense				3,000
Occupancy expense				16,000
Office and other administrative expense				37,000	-
				$694,000	$694,000

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, advertising copy, and other records, the following tabulation was obtained:

				Traceable Expense
				Dept. A	Dept. B	Common Expense
Sales salaries expense				$49,000	$21,000	$7,000
Advertising expense				16,000	7,000	11,000
Insurance expense				8,000	2,000
Occupancy expense						16,000
Uncollectible accounts expense				2,000	1,000
Office and other administrative expense				18,000	10,000	9,000

Prepare a departmental income statement for Stillwell Emporium, Inc., showing departmental contribution to common expenses, assuming an overall income tax rate of 30%.

Do not use negative signs with your answers below.

Stillwell Emporium, Inc. Departmental Income Statement For the Year Ended December 31, 2016
				Dept. A	Dept. B	Total
Sales				Answer	Answer	Answer
Cost of goods sold				Answer	Answer	Answer
Gross profit				Answer	Answer	Answer
Operating expenses:
Sales salaries expense				Answer	Answer	Answer
Advertising expense				Answer	Answer	Answer
Insurance expense				Answer	Answer	Answer
Uncollectible accounts expense				Answer	Answer	Answer
Office and other administrative expense				Answer	Answer	Answer
Traceable operating expenses				Answer	Answer	Answer
Contribution to common expenses				Answer	Answer	Answer
Common expenses						Answer
Income before tax						Answer
Income tax expense						Answer
Net income						Answer

Answer 1

Answer

Stillwell Emporium, Inc.
Departmental Income Statement
For the Year Ended December 31, 2016
	Dept. A	Dept. B	Total
Sales	$367,000	$143,000	$510,000
Cost of goods sold	$216,000	$70,000	$286,000
Gross profit	$151,000	$73,000	$224,000
Operating expenses:
Sales salaries expense	$49,000	$21,000	$70,000
Advertising expense	$16,000	$7,000	$23,000
Insurance expense	$8,000	$2,000	$10,000
Uncollectible accounts expense	$2,000	$1,000	$3,000
Office and other administrative expense	$18,000	$10,000	$28,000
Traceable operating expenses	$93,000	$41,000	$134,000
Contribution to common expenses	$58,000	$32,000	$90,000
Common expenses			$43,000
Income before tax			$47,000
Income tax expense			$14,100
Net income			$32,900