Championship Sports Inc. operates two divisions, the Winter Sports Division and the Summer Sports Division. The following income and expense accounts have been obtained from the trial balance, after all adjustments, including for inventories, have been recorded and posted as of the end of the fiscal year, 31 December 20Y9:

Sales—Winter Sports Division	8.900.000 $
Sales—Summer Sports Division	16.400.000
Cost of Goods Sold—Winter Sports Division	5.000.000
Cost of Goods Sold—Summer Sports Division	9.000.000
Sales Expense—Winter Sports Division	650.000
Sales Expense—Summer Sports Division	1.200.000
Administrative Expenses—Winter Sports Division	800.000
Administrative Expenses—Summer Sports Division	1.450.000
Ad spend	1.090.000
Transportation Expense	192.000
Receivable Collection Expense	68.000
Warehouse Expense	1.800.000

The principles to be used in the distribution of expenses, together with other information, are as follows:

1. Advertising expense at the headquarters allocated to the departments on the basis of usage: Winter Sports Department, $375,000; Summer Sports Division, $715,000.
2. Transportation expense—$4.00 per bill of lading allocated to divisions: Winter Sports Division, 17,500 bills of lading; Summer Sports Division, 30,500 bill of lading.
3. Accounts receivable collection expense—Winter Sports Division, 25,000 sales invoices filed at headquarters and allocated to departments at a rate of $1.00 per invoice; Summer Sports Division, 43,000 sales invoices.
4. Warehouse expense—allocated to departments based on floor space used to store departmental products: Winter Sports Department, 60,000 square feet; Summer Sports Division, 90,000 square feet.

Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. If necessary, round your intermediate calculations to two decimal places.

Championship Sports Inc.
Segmental Income Statements
For the Year Ended 31 December 20Y9
	Winter Sports Department	Summer Sports Department
Sales	$	$
cost of goods sold
Gross profit	$	$
Split selling and administrative expenses:
Split selling expenses	$	$
Department administrative expenses
Total split selling and administrative expenses	$	$
Operating income before support department allocations	$	$
Support department allocations:
Ad spend	$	$
transportation expense
receivable collection expense
Warehouse expense
Total support department allocations	$	$
Operating income	$	$

Provide supporting calculations for support department allocations. If necessary, round per unit, two decimal places, and final answers equal to the nearest dollar.

Championship Sports Inc.
Support Department Allocations
For the Year Ended 31 December 20Y9
	Winter Sports Department	Summer Sports Department	Total
Ad spend	$	$	$
Carriage fee per bill of lading	$	$
Number of bills of lading
transportation expense	$	$	$
Receivables collection rate	$	$
Number of sales invoices
receivable collection expense	$	$	$
Warehouse rate per square meter	$	$
number of square meters
Warehouse expense	$	$	$

Answer rating: 100% (QA)

To prepare the divisional income statement for Championship Sports Inc we need to calculate the various expenses for both the Winter Sports Division and the Summer Sports Division Additionally we will ... View the full answer