1. CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 4-4 Responsibility Statements for a Merchandising Business

2. CENTURY 21 ACCOUNTING © Thomson/South-Western 2 LESSON 4-4 1.Determine net sales for department. 2.Determine cost of merchandise sold for department. 3.Calculate gross profit. 4.Record direct expenses of the department. 5.Calculate the departmental margin. DEPARTMENTAL MARGIN STATEMENT—AUDIO page 111 3 5 4 2 1

3. CENTURY 21 ACCOUNTING © Thomson/South-Western 3 LESSON 4-4 COMPONENT PERCENTAGES ON DEPARTMENTAL MARGIN STATEMENTS Net Sales Departmental Margin Component Percentage for Departmental Margin ÷ = $49,222.61÷ = 14.3% $344,476.46 Component Percentages 20X320X220X1 Departmental Margin 14.3%13.4%13.1% page 112

4. CENTURY 21 ACCOUNTING © Thomson/South-Western 4 LESSON 4-4 DEPARTMENTAL MARGIN STATEMENT—VIDEO page 113 1.Determine net sales for department. 2.Determine cost of merchandise sold for department. 3.Calculate gross profit. 4.Record direct expenses of the department. 5.Calculate the departmental margin. 3 5 4 2 1

5. CENTURY 21 ACCOUNTING © Thomson/South-Western 5 LESSON 4-4 INCOME STATEMENT WITH DEPARTMENTAL MARGIN 1 9 1.Prepare the heading. 2-6.Use information from the departmental margin statements. 7.Use information from the Income Statement columns of the work sheet. 8.Complete the income statement. 9.Calculate component percentages. page 114 2-6 7 8

6. CENTURY 21 ACCOUNTING © Thomson/South-Western 6 LESSON 4-4 STATEMENT OF STOCKHOLDERS’ EQUITY page 115

7. CENTURY 21 ACCOUNTING © Thomson/South-Western 7 LESSON 4-4 BALANCE SHEET page 116

8. CENTURY 21 ACCOUNTING © Thomson/South-Western 8 LESSON 4-4 BALANCE SHEET page 116

9. CENTURY 21 ACCOUNTING © Thomson/South-Western 9 LESSON 4-4 TERMS REVIEW responsibility statements income statement statement of stockholders’ equity capital stock retained earnings dividends balance sheet page 117