Reference: 22_02
Jamesway Corporation Has Two Separate Divisions That Operate

question 131

Multiple Choice

Reference: 22_02
Jamesway Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year:
$$\begin{array} { l c c c } & \text { White } & & \text { Grey } \\& \text { Division } & & \text { Division } \\ \text { Sales (nat) } & \$ 200,000 & & \$ 400,000 \\\text { Salary expense } & 28,000 & & 48,000 \\\text { Cost of goods sold } & 100,000 & & 159,000\end{array}$$ The White Division occupies 20,000 square feet in the plant. The Grey Division occupies 30,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $50,000.
-Grey Division's departmental income is:

• A) $163,000
• B) $211,000
• C) $241,000
• D) $52,000
• E) $173,000

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Definitions:

Partner's Interest

This refers to the ownership share or equity a partner holds in a partnership, representing their portion of the profits, losses, and capital.

Guaranteed Payment

Payments made to a partner within a partnership that are made without regard to the partnership's income and are guaranteed for services or use of capital.

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured, and may also cover regular medical services or long-term nursing care needs.

Pre-Contribution Gain

The increase in value of an asset or investment before it is contributed to a retirement plan or investment account.