College Accounting: WeeK 5 Homework (E25-1A, P25-9A, P25-9B)

College Accounting 
WeeK 5 Homework (E25-1A, P25-9A, P25-9B) 

E25-1A Gross Profit Section of Departmental Income Statement 
Bill Walter and Alice Jennings are partners in a business called Walters and Jennings Sportswear that sells athletic footwear. They have organized the business on a department basis as follows: running shoes, walking shoes, and specialty shoes. At the end of the first year of operation, the sales and cost of goods sold for the three departments are as follows: 
Running Shoes 
Sales 36,000 
Cost of goods sold 23,400 

Prepare the gross profit section of a department income statement for the year ended December 31, 20-. Show the gross profit for each department and for the business in total. 

P25-9A Income Statement With Departmental Direct Operating Margin and Total Operating Income. 
Durwood Thomas operates the Business Thomas Security that sells security equipment for commercial property and residential homes. The following information is provided for the year ended December 31, 20-. 
Commercial Residential Homes 
Net sales 465,000 135,000 
Cost of goods sold 279,250 54,000 
Direct operating expenses: 
Advertising expense 35,000 20,000 
Store clerk's wages expense 30,000 18,000 
Truck drivers' wages expense 15,000 15,000 
Bad debt expense 3,000 8,000 
Depreciation expense delivery equipment 6,000 4,000 
Other operating expenses 20,000 10,000 
Indirect operating expenses: 
Store clerks' wages expense 10,000 
Advertising expense 15,000 
Store rent expense 20,000 
Other operating expenses 10,000 

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

P 25-9A Income Statement With Departmental Direct Operating Margin and Total Operating Income. 
Durwood Thomas operates the Business Thomas Security that sells security equipment for commercial property and residential homes. The following information is provided for the year ended December 31, 20-. 
Commercial Residential Homes 
Net sales 465,000 135,000 
Cost of goods sold 279,250 54,000 
Direct operating expenses: 
Advertising expense 35,000 20,000 
Store clerk's wages expense 30,000 18,000 
Truck drivers' wages expense 15,000 15,000 
Bad debt expense 3,000 8,000 
Depreciation expense delivery equipment 6,000 4,000 
Other operating expenses 20,000 10,000 
Indirect operating expenses: 
Store clerks' wages expense 10,000 
Advertising expense 15,000 
Store rent expense 20,000 
Other operating expenses 10,000 

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