N1. Vernon Company operates three segments. Income statements for the segments imply that profitability could be improved ifSegment A were eliminated.SegmentSalesCost of goods soldSales commissionsContribution marginGeneral fixed operating expenses (allocation of president's salary)Advertising expense (specific to individual divisions)Net income (loss)Complete this question by entering your answers in the tabs below.Required A Required BVERNON COMPANYIncome Statements for Year 2Requireda. Prepare a schedule of relevant sales and costs for Segment A.b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment Aand (2) the elimination of Segment A.Prepare a schedule of relevant sales and costs for Segment A.Relevant Rev. and Cost items for Segment ASalesEffect on incomeFAс$261,000AB$ 168,000 $254,000(122,000)(22,000)(76,000)(22,000)24,000156,000(42,000)(40,000)(5,000) (16,000)$ (23,000) $100,000 $113,0000(95,000)(29,000)137,000(24,000)0 a. Prepare a schedule of relevant sales and costs for Segment A.b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment Aand (2) the elimination of Segment A.Complete this question by entering your answers in the tabs below.Required A Required BPrepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment Aand (2) the elimination of Segment A.VERNON COMPANYComparative Income Statements for the Year 2Keep Seg. ADecisionSalesCost of goods soldSales commissionsContribution marginGeneral fixed operating expensesAdvertising expenseNet Income$$Eliminate Seg. A0 $0 $00

Segmented Income Statement:A segmented income statement provides a more thorough analysis of…

Vernon Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) VERNON COMPANY Income Statements for Year 2 Complete this question by entering your answers in the tabs below. Required A Required B Required a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A A B $ 168,000 $254,000 $261,000 (122,000) (22,000) 24,000 156,000 (42,000) (40,000) (5,000) (16,000) $ (23,000) $100,000 $113,000 (76,000) (22,000) (95,000) (29,000) 137,000 (24,000) 0