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Lessing Toy and Hobby (LTH) is a chain of hobby and craft stores in the Southeast. LTH operates multiple stores and is organized into two divisions: Northern and Southern. Individual stores are placed in one or the other division based on geography. Recent demographic changes in the Northern Division area have led to declining foot traffic and sales in the LTH stores. Senior corporate executives have been asking whether the chain should close those stores and focus on the stores in the Southern Division. The most recent income statement for the Northern Division follows. The managers of Lessing Toy \& Hobby (LTH) have decided to keep the stores in the Northern Division open, in spite of the dwindling demand in the area. They want to forecast what the income will be in the coming year, using the income statement as the base. The cost analyst at LTH estimates soles in the coming year will only be 85 percent of the current year sales. Cost of goods sold is estimated to be 90 percent of the current year. The managers have decided to increase advertising next year by 10 percent above the current year, but will cut administrative salaries in the Northern Division by 30 percent. They also expect to lower rent and occupancy costs by 15 percent. Allocated corporate overhead, based on information from the CFO, is expected to be $1.2million. Required: Prepare an income statement for Year 2 for the Northern Division based on the estimates provided by the cost analyst and other managers at LTH. Note: Enter your answers in thousands e.g., 10,000,000 should be entered as 10,000 . Round your answers to 2 decimal places. Enter negative amounts with a minus sign. Required: Prepare an income statement for Year 2 for the Northern Division based on the estimates provided by the cost analyst and other managers at LTH. Note: Enter your answers in thousands e.g., 10,000,000 should be entered as 10,000. Round your answers to 2 decimal places. Enter negative amounts with a minus sign

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