Question

Departmental Income Statement The following information was obtained from the ledger of Woodfield Candies, Inc., at the end of 2016: Woodfield Candies, Inc. Trial Balance December 31, 2016 Debit Credit $42,000 156,000 180,000 540,000 Cash Accounts receivable (net) Inventory, December 31, 2016 Equipment and fixtures (net) Accounts payable Common stock Retained earnings Revenue-department X Revenue department Cost of goods sold-department X Cost of goods sold department Y Sales salaries expense Advertising expense $108,000 450,000 180,000 840,000 360,000 420,000 216,000 192,000 42.000 24,000 9,000 36,000 81,000 Insurance expense Uncollectible accounts expense Occupancy expense Office and other administrative expense ! $1,938,00D $1,938,000 Woodfield 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 E Menu Woodfield 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. Y 147,000 $45,000 18,000 6,000 15,000 9,000 6,000 3,000 Dept. X Common Ex Sales salaries expense Advertising expense Insurance expense Uncollectible accounts expense Occupancy expense Office and other administrative expense $18,000 36,000 2,000 9,000 60,000 Prepare a departmental income statement for Woodfield Candies, Inc., showing departmental contribution to common expenses, assuming an overall income tax rate of 35%. Do not use negative signs with your answers below. Woodfield Candies, Inc Departmental Income Statement For the Year Ended December 31, 2016 Dept. X Total Dept. Y Sales Cost of goods sold Gross profit Operating expenses: Sales salaries expense Advertising expense Insurance expense

Answer 1

Solution Woodfield Candies, Inc. Departmental Income Statement For the Year Ended December 31,2016 Total Dept. X Dept. Y 840,000$360,000 $1,200,000 420,000$216,000$636,000 $420,000$144,000$564,000 Sales Cost of goods sold Gross profit Operating expenses $45,000 $192,000 $24,000 $24,000 $9,000 $21,000 72,000$270,000 $72,000$294,000 $114,000 $180,000 $63,000 $117,000 Sales salaries expense Advertising expense Insurance expense Uncollectible accounts expense Office and other administrative expense $147,000 $18,000 $15,000 $6,000 $12,000 $198,000 $222,000 $6,000 $9,000 $3,000 $9,000 Total operating expenses Departmental contribution Common expenses Profit before Tax Income Tax (35%) Net Income