Problem: Module 6 Textbook Problem 7 Learning Objective: 6-4 Make appropriate segment elimination decisions Thornton Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. THORNTON COMPANY Income Statements for Year 2 Segment Sales B $ 163,000 $254,000 $259,000 Cost of goods sold (127,000) (79,000) (85,000) Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) (19,000) (31,000) (24,000) 17,000 144,000 150,000 (37,000) (34,000) (43,000) (5,000) (17,000) $ (25,000) $93,000 $107,000 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.