Appendix B Graded Homework Assignment

Big Sky Sporting Goods Co$.$ operates two divisions$$the Winter Sports Division

and the Summer Sports Division. The following income and expense accounts

were provided from the trial balance as of December $31,20$Y$9,$ the end of the

fiscal year, after all adjustments, including those for inventories, were recorded

and posted:

Sales$$Winter Sports Division $$12,600,000$

Sales$$Summer Sports Division $16,300,000$

Cost of Goods Sold$$Winter Sports Division $7,560,000$

Cost of Goods Sold$$Summer Sports Division $9,454,000$

Sales Expense$$Winter Sports Division $2,016,000$

Sales Expense$$Summer Sports Division $2,282,000$

Administrative Expense$$Winter Sports Division $1,260,000$

Administrative Expense$$Summer Sports Division $1,450,700$

Advertising Expense $578,000$

Transportation Expense $265,660$

Accounts Receivable Collection Expense $174,000$

Warehouse Expense $1,540,000$

The bases to be used in allocating expenses, together with other essential

information, are as follows:

$1.$ Advertising expense$$incurred at headquarters, allocated to divisions on

the basis of usage: Winter Sports Division, $$252,000$; Summer Sports

Division, $$326,000.$

$2.$ Transportation expense$$allocated to divisions at an allocation rate of

$$7\mathrm{.}40$ per bill of lading: Winter Sports Division, $17,200$ bills of lading;

Summer Sports Division, $18,700$ bills of lading.

$3.$ Accounts receivable collection expense$$incurred at headquarters,

allocated to divisions at an allocation rate of $$6\mathrm{.}00$ per invoice: Winter

Sports Division, $11,500$ sales invoices; Summer Sports Division, $17,500$

sales invoices.

$4.$ Warehouse expense$$allocated to divisions on the basis of floor space

used in storing division products: Winter Sports Division, $102,000$ square

feet; Summer Sports Division, $118,000$ square feet.Appendix B Graded Homework Assignment

Big Sky Sporting Goods Co$.$ operates two divisions$$the Winter Sports Division

and the Summer Sports Division. The following income and expense accounts

were provided from the trial balance as of December $31,20$Y$9,$ the end of the

fiscal year, after all adjustments, including those for inventories, were recorded

and posted:

Sales$$Winter Sports Division $$12,600,000$

Sales$$Summer Sports Division $16,300,000$

Cost of Goods Sold$$Winter Sports Division $7,560,000$

Cost of Goods Sold$$Summer Sports Division $9,454,000$

Sales Expense$$Winter Sports Division $2,016,000$

Sales Expense$$Summer Sports Division $2,282,000$

Administrative Expense$$Winter Sports Division $1,260,000$

Administrative Expense$$Summer Sports Division $1,450,700$

Advertising Expense $578,000$

Transportation Expense $265,660$

Accounts Receivable Collection Expense $174,000$

Warehouse Expense $1,540,000$

The bases to be used in allocating expenses, together with other essential

information, are as follows:

$1.$ Advertising expense$$incurred at headquarters, allocated to divisions on

the basis of usage: Winter Sports Division, $$252,000$; Summer Sports

Division, $$326,000.$

$2.$ Transportation expense$$allocated to divisions at an allocation rate of

$$7\mathrm{.}40$ per bill of lading: Winter Sports Division, $17,200$ bills of lading;

Summer Sports Division, $18,700$ bills of lading.

$3.$ Accounts receivable collection expense$$incurred at headquarters,

allocated to divisions at an allocation rate of $$6\mathrm{.}00$ per invoice: Winter

Sports Division, $11,500$ sales invoices; Summer Sports Division, $17,500$

sales invoices.

$4.$ Warehouse expense$$allocated to divisions on the basis of floor space

used in storing division products: Winter Sports Division, $102,000$ square

feet; Summer Sports Division, $118,000$ square feet.