The Well's condensed income statement is presented below:
Revenues $1,000,000
Expenses
Cost of goods sold $400,000
Operating and administrative expenses 200,000
Depreciation expense 40,000 640,000
Income before taxes 360,000
Income tax expenses 108,000
Net income $ 252,000
The following data is compiled relative to The Well's operating segments:
Percent Identified with Segment
Books Furnishings F&B
Revenue 42% 50% 8%
COGS 48 49 3
Operating and
administrative 35 50 15
expense
Depreciation 46 42 2
Exp.
Included in the amounts allocated to each segment on the above percentages are the following expenses which relate to general corporate activities:
Operating Segment Books Furnishings F&B Totals
Operating and
administrative expense $12,000 $9,000 $3,000 $24,000
Depreciation expense 3,500 4,000 2,500 10,000
What is the amount allocated as depreciation expense to "Books"?