Question

La Hacienda Company has two departments: Furniture and Lighting. La Hacienda’s accountant prepares an adjusted trial balance (shown below) at the end of the fiscal year.

.:.
The trial balance is prepared after all adjustments, including the adjustments for merchandise inventory, have been recorded and posted.
Merchandise inventories at the beginning of the year were as follows: Furniture Department, $ 83,850; Lighting Department, $ 42,630. The bases (and sources of figures) for apportioning expenses to the two departments are as follows (rounded to the nearest dollar):
• Sales Salary Expense (payroll register): Furniture Department, $ 74,800; Lighting Department, $ 48,420
• Advertising Expense (newspaper column inches): Furniture Department, 600 inches; Lighting Department, 400 inches
• Depreciation Expense, Store Equipment (property and equipment ledger): Furniture Department, $ 9,616; Lighting Department, $ 3,820
• Store Supplies Expense (requisitions): Furniture Department, $ 418; Lighting Department, $ 324
• Miscellaneous Selling Expense (volume of gross sales): Furniture Department, $ 408; Lighting Department, $ 272
• Rent Expense and Utilities Expense (floor space): Furniture Department, 2,500 square feet; Lighting Department, 1,500 square feet
• Bad Debts Expense (volume of gross sales): Furniture Department, $ 1,080; Lighting Department, $ 720
• Miscellaneous General Expense (volume of gross sales): Furniture Department, $ 492; Lighting Department, $ 328

Required
Prepare an income statement by department to show income from operations, as well as a nondepartmentalized income statement (using the Total columns) to show net income for the entire company.



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  • CreatedOctober 21, 2014
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