Perkins Appliance & Furniture Company has two departments, appliances and furniture. Operating information for 2016 appears below.

Common operating expenses of the firm were \($180,000\) .
Required

a. Prepare a departmental income statement showing departmental contribution to common expenses and net income of the firm. Assume an overall effective income tax rate of 40%. Perkins uses a periodic inventory system.

b. Calculate the gross profit percentage for each department.

c. If the common expenses were allocated 70% to the appliance department and 30% to the furniture department, what would the net income be for each department?

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Inventory, January 1, 2016. Inventory, December 31, 2016. Net sales... Purchases. Purchases discounts Transportation in Traceable departmental expenses. Appliance Department $ 120,000 75,600 1,120,000 Furniture Department $ 90,000 48,000 760,000 640,000 480,000 8,000 6,000 18,000 16,000 199,600 82,000