College Accounting: P25-9B Tom Peterson owns the business Peterson's Furniture and Appliances

College Accounting

P25-9B Income Statement with Departmental Direct Operating Margin and Total Operating Income.
Tom Peterson owns the business Peterson's Furniture and Appliances. The following information is provided for the year ended December 31, 20-.
Furniture Department Appliances Department
Net sales 390,000 810,000
Cost of goods sold 234,000 405,000
Direct operating expenses:
Advertising expense 30,000 60,000
Store clerks' expense 40,000 90,000
Truck drivers' wages expense 35,000 65,000
Depreciation expense delivery equipment 4,000 8,000
Bad Debt expense 4,000 9,000
Other operating expenses 15,000 50,000

Indirect operating expenses:
Store clerks' wages expense 20,000
Advertising expense 15,000
Store rent expense 50,000
Other operating expenses 25,000

Required:
1. Prepare an income statement showing departmental direct operating margin and total operating income.
2. Calculate departmental direct operating margin percentages.
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