Prepare a divisional income statement

Reference no: EM133347075

Profit center responsibility reporting

Championship Sports Inc. operates two divisions-the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted:

Sales-Winter Sports Division	$8,700,000
Sales-Summer Sports Division	15,800,000
Cost of Goods Sold-Winter Sports Division	5,400,000
Cost of Goods Sold-Summer Sports Division	9,000,000
Sales Expense-Winter Sports Division	730,000
Sales Expense-Summer Sports Division	1,800,000
Administrative Expense-Winter Sports Division	770,000
Administrative Expense-Summer Sports Division	1,730,000
Advertising Expense	1,101,000
Transportation Expense	262,500
Accounts Receivable Collection Expense	134,000
Warehouse Expense	822,000

The bases to be used in allocating expenses, together with other information, are as follows:

Advertising expense-incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $377,000; Summer Sports Division, $724,000.
Transportation expense-charged back to divisions at a charge rate of $5.00 per bill of lading: Winter Sports Division, 19,000 bills of lading; Summer Sports Division, 33,500 bills of lading.
Accounts receivable collection expense-incurred at headquarters, charged back to divisions at a charge rate of $2.00 per invoice: Winter Sports Division, 23,000 sales invoices; Summer Sports Division, 44,000 sales invoices.
Warehouse expense-charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 51,000 square feet; Summer Sports Division, 86,000 square feet.
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your intermediate calculations.

Reference no: EM133347075

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