45) Sports Galore is trying to allocate its building’s depreciation based on floor space. Determine the amount that should be assigned to the golf department and to the basketball department.

 

Golf BasketballTotal

Floor Space30,00060,00090,000

Depreciation Exp$39,000

 

46) You have been hired by Jones to allocate his utilities to each department based on space (in square footage).

Complete the assignment.

 

Shoe Dept. Jewelry Dept. Clothing Dept.Total

Space (square feet)12,0004,00024,00040,000

Utilities Cost$60,000

47) The following information is available for Charter Company:

 

Item

Department 1

Department 2

Total

Equipment value

$500,000

$250,000

$750,000

Square footage

25,000 sq.ft.

35,000 sq.ft.

60,000 sq.ft

Sales

$1,250,000

$725,000

$1,975,000

 

Complete the following chart to determine the total cost for each department, using the most appropriate method to apportion the indirect costs.

 

Cost

Department 1

Department 2

Total

Depreciation

 

 

$120,000

Utilities

 

 

$45,000

Sales Commissions

 

 

$59,250

Rent

 

 

$150,000

TOTALS

 

 

$374,250

 

48) From the following, calculate income by departments.

 

Dept. 1Dept. 2

Net Sales$8,000$6,500

Cost of Goods Sold5,0003,200

Delivery Expense570420

Advertising Expense390310

Depreciation Expense620530

49) From the following partial data, prepare a departmental income statement showing income before tax along with net income for Mason Corporation for the month ended December 31.

 

Net Sales-Sporting Goods$3,000

Net Sales-Shoes1,500

Cost of Goods Sold-Sporting Goods1,950

Cost of Goods Sold-Shoes900

Income Tax Rate is 30%

Sporting Goods Dept.-5,000 square feet

Shoe Dept.-3,000 square feet

 

The following items are indirect expenses and should be allocated:

 

Basis of Appropriation

Building Expense$240Square Footage

Delivery Expense$135Net Sales

Depreciation Expense$40Square Footage

 

 



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