Question

The following data were summarized from the accounting records for Jersey Coast Construction Company for the year ended June 30, 20Y8:

Cost of goods sold:
Commercial Division	$916,250
Residential Division	450,675
Administrative expenses:
Commercial Division	$149,200
Residential Division	128,800
Service department charges:
Commercial Division	$112,740
Residential Division	68,850
Sales:
Commercial Division	$1,360,500
Residential Division	749,500

Prepare divisional income statements for Jersey Coast Construction Company. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Amount Descriptions
Administrative expenses
Cost of goods sold
Gross profit
Income from operations
Income from operations before service department charges
Sales
Selling expenses
Service department charges
Transportation expenses

X

Divisional Income Statements

Answer 1

Based on the data given, the divisional income statement can be prepared as:

Sales - (1360500+749500) = 2110000

Cost of goods sold - (916250+450675) = 1366925

Gross profit = (2110000-1366925) = 743075

Administrative expenses - (149200+128800) = 278000

Selling Expenses -0

Transport Expenses - 0

Income from operations before service department charges - (743075-278000) = 465075

Service department charges - (112740+68850) = 181590

Income from operations = (465075-181590) = 283485