Warton Company began operations in January 2009 with two operating (selling) departments and one service (office) department. Its departmental income statements follow.

Warton plans to open a third department in January 2010 that will sell paintings. Management predicts that the new department will generate $50,000 in sales with a 45% gross profit margin and will require the following direct expenses: sales salaries, $8,500; advertising, $1,100; store supplies, $400; and equipment depreciation, $1,000. It will fit the new department into the current rented space by taking some square footage from the other two departments. When opened the new painting department will fill one fifth of the space presently used by the clock department and one-fourth used by the mirror department.
Management does not predict any increase in utilities costs, which are allocated to the departments in proportion to occupied space (or rent expense). The company allocates office department expenses to the operating departments in proportion to their sales. It expects the painting department to increase total office department expenses by $8,000. Since the painting department will bring new customers into the store, management expects sales in both the clock and mirror departments to increase by 8%. No changes for those departments€™ gross profit percents or their direct expenses are expected except for store supplies used, which will increase in proportion to sales.
Required
Prepare departmental income statements that show the company€™s predicted results of operations for calendar year 2010 for the three operating (selling) departments and their combined totals. (Round percents to the nearest one-tenth and dollar amounts to the nearest wholedollar.)

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WARTON COMPANY For Year Ended December 31,2009 Clock Mirror Combined Sales .. $170,000 $95,000 $265.000 142,200 22,800 83.300 58.900 86,700 36,100 Gross profit _ Direct expenses 28,100 Sales salaries .. Store supplies used Total direct expenses ...21.000 2.100 550 2.300 .5.950 350 3,200 35,000 90 9,050 Allocated expenses Utilities expense .. Share of office department expenses .. Total allocatede 7.040 3.780 1,600 6,500 23,34011880 2.800 16 3.500 23.340 10,820 4400 20,000 49.290 20,930 0,220