Cranford Cars Ltd operates a car sales business with two departments — new cars and secondhand cars. The company’s accountant has prepared an income statement for the year ending 30 June 2020.

The beginning inventory of new cars was $185 000, and ending inventory was $157 000.
The beginning inventory for the second‐hand cars was $78 000, and ending inventory was $65 000.
The company’s records indicate that the following percentages of each expense or revenue are directly chargeable to the departments. Any balance left in an expense account is an indirect expense.

Required

(a) Prepare a departmental income statement for the year ended 30 June 2020, showing the departmental contribution for each department.

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INCOME Sales Cost of sales: Beginning inventory Purchases Goods available for sale Ending inventory Cost of sales GROSS PROFIT EXPENSES Advertising Salaries Insurance CRANFORD CARS LTD Income Statement for the year ended 30 June 2020 $263000 646600 909 600 222 000 47 700 132 500 45 600 $1 130000 687 600 442 400