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Homework answers / question archive / ABC Company provided the following information for the most recent year: · Cash sales totaled $255,000 · Credit sales totaled $479,000 · Cash collections from customers for services yet to be provided totaled $88,000 · Cost of Goods Sold was $336,000 · A $22,000 loss from the sale of property and equipment occurred · Interest income was $7,700 · Interest expense was $19,900 · Rent expense was $36,000 · Salaries expense was $49,000 · Other operating expenses totaled $79,000 · Unearned revenue was $4,000 How much was ABC Company's operating income for the year? A
ABC Company provided the following information for the most recent year:
· Cash sales totaled $255,000
· Credit sales totaled $479,000
· Cash collections from customers for services yet to be provided totaled $88,000
· Cost of Goods Sold was $336,000
· A $22,000 loss from the sale of property and equipment occurred
· Interest income was $7,700
· Interest expense was $19,900
· Rent expense was $36,000
· Salaries expense was $49,000
· Other operating expenses totaled $79,000
· Unearned revenue was $4,000
How much was ABC Company's operating income for the year?
A. $221,800
B. $322,000
C. $199,800
D. $234,000
Computation of Operaing Income:
Operating Income = Operating Revenues - Operating Expenses
Here,
Operating Revenues = Cash Sales + Credit Sales = $255,000 + $479,000 = $734,000
Operating Expenses = Cost of Goods Sold + Rent Expenses + Salaries Expenses + Other Operating Expenses =
$336,000 + $36,000 + $49,000 + $79,000 = $500,000
Operating Income = $734,000 - $500,000 = $234,000
So, Operating Income is $234,000. The correct option is D "$234,000".
