Royal Auto Ltd operates a car sales business with two departments — new cars and second‐hand cars. The company’s accountant has prepared a statement of financial performance for the year ending 30 June 2025.

Required

(a) Prepare a departmental statement of financial performance for the year ended 30 June 2025, showing the departmental contribution for each department.

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ROYAL AUTO LTD Statement of financial performance for the year ended 30 June 2025 Income Sales Cost of sales: Beginning inventory Purchases Goods available for sale Ending inventory Cost of sales Gross profit Expenses Advertising Salaries Insurance Depreciation Supplies Interest Total expenses Profit $ 263 000 646 600 909 600 222 000 $ 1 130 000 47 700 132 500 687 600 442 400 45 600 18 000 27 500 38 160 309 460 $ 132 940 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.