Jamesway Corporation Has Two Separate Divisions That Operate as Profit

question 153

Multiple Choice

Jamesway Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year: 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. Compute departmental income for the White and Grey Divisions, respectively.

• A) $52,000; $163,000.
• B) $172,000; $352,000.
• C) $72,000; $163,000.
• D) $72,000; $193,000.
• E) $100,000; $241,000.

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Definitions:

Bank Reconciliation

A process of matching and comparing figures from the accounting records against those shown on a bank statement to ensure they are in agreement and to identify any discrepancies.

Bank Statement

A document provided by a bank, detailing the transactions in a customer's account over a specified period.

Cash Balance

The amount of cash a company has available at any point in time, as reflected in its financial statements.

Timing Differences

Discrepancies between the timing of cash flows and the recognition of revenues and expenses in accounting records.