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Responsibility income statement preparation

RESPONSIBILITY INCOME STATEMENT PREPARATION

HAPPY LAND is segmented into two sales departments: software and video games. During April these two
departments reported the following operating results:

Software Video games
Sales $400,000 $200,000
Variable costs (as a % of sales) 65% 56%
Traceable fixed costs $20,000 $16,000

In addition, fixed costs common to both departments amounted to $42,000.

Complete the following segemented income statement for Happy Land. Follow the contribution margin
approach and show percentages as well as dollar amounts. Conclude the income statement with the company's
income from operations. Also, the format/template is attached.

HAPPY LAND
INCOME STATEMENT BY PRODUCT LINES
FOR THE MONTH ENDED APRIL 30

SEGMENTS
HAPPY LAND SOFTWARE VIDEO GAMES
DOLLARS % DOLLARS % DOLLARS %
SALES $400,000 100 $200,000 100
VARIABLE COSTS 65 56

Attachments

Solution Preview

Please see the attached Excel file for the breakdown of the formulas and proper income statement.

HAPPY LAND
INCOME STATEMENT BY PRODUCT LINES
FOR THE MONTH ENDED APRIL 30

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Solution Summary

The responsibility income statement preparations are examined.

$2.19