Spiess Corporation Has Two Major Business Segments--Apparel and Accessories

question 71

Essay

Spiess Corporation has two major business segments--Apparel and Accessories. Data concerning those segments for December appear below:
Common fixed expenses totaled $457,000 and were allocated as follows: $163,000 to the Apparel business segment and $294,000 to the Accessories business segment.Required:Prepare a segmented income statement in the contribution format for the company.

---

Definitions:

Prepayment

Payments made in advance for goods or services, recorded as an asset until the corresponding goods or services are received.

Adjusting Entry

An accounting record made to update the book value of an asset or to correct or allocate income and expenses to the appropriate period.

Prepaid Asset

Expenses paid in advance for future benefits, such as insurance or rent, recognized as assets until they are utilized.

Prepaid Subscriptions

Payments made in advance for subscription-based services or products, recognized as assets until the services or products are received.