Problem: Module 6 Textbook Problem 7 Learning Objective: 6-4 Make appropriate segment elimination decisions Zachary Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. ZACHARY COMPANY Income Statements for Year 2 Segment Sales A B $ 171,000 $254,000 $253,000 Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) (122,000) (21,000) (90,000) (91,000) (25,000) (23,000) 28,000 139,000 139,000 (39,000) (38,000) (36,000) (7,000) (13,000) 0 $ (18,000) $ 88,000 $103,000 Required a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Sales Relevant Rev. and Cost items for Segment A Effect on income Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. ZACHARY COMPANY Comparative Income Statements for the Year 2 Decision Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses Advertising expense Net Income Keep Seg. A Eliminate Seg. A