Versatile Vacuums sells two products — domestic and commercial. The store’s income statement for the year ending 30 June 2020 has been prepared from the accounting records.

The company’s records indicate that the following percentages of each expense or revenue account are directly chargeable to the departments. (Any balance left in an expense account after allocation of direct charges is treated as an indirect expense.)

The beginning inventory for the domestic department was $64 000 and the ending inventory was $44 000. The beginning inventory for the commercial department was $78 000 and the ending inventory was $54 600.
Required

(a) Prepare a departmental income statement for the year ending 30 June 2020 that shows the departmental contribution for each department.

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VERSATILE VACUUMS Income Statement for the year ended 30 June 2020 INCOME Sales Cost of sales: Beginning inventory Purchases Goods available for sale Ending inventory Cost of sales GROSS PROFIT EXPENSES Sales salaries Advertising Depreciation Managerial salaries Rent Utilities Sundry expenses Total expenses PROFIT $142.000 510000 652 000 98 600 $1 600 000 431 250 74 000 62 000 140 000 88 700 20 000 54 000 553 400 1 046 600 869 950 $ 176650