Question

Calculate operating income and net income Selling, general, and administrative expenses were $66,000; net sales were $300,000; interest expense was 7,100; research and development expenses were $31500; net cash provided by operating activities was $79200; net income was $16800; income tax expense was $7600; cost of goods sold was $165,000.
Required:
a. Calculate operating income for the period.
b. Calculate net income for the period.

Answer 1

Answer:

a. $37,500

b. $22,800

Explanation:

The computation is shown below:

a. For operating income

Net Sales   $300,000

Less: Cost of Goods Sold   -$165,000

Gross Profit        $135,000

Less: Selling, general and administrative Expenses  $66,000

Less: Research and development expenses    $31,500

Operating Income (EBIT)         $37,500

b. For the net income

Operating Income (EBIT)         $37,500

Less: Interest Expense            -$7,100

Earnings before Tax (EBT)      $30,400

Less: Taxes                               $7,600

Earnings after Tax or Net Income  $22,800

We simply applied the above equation or format for determining the operating income and net income

Answer 2

Answer:

Operating Income for the period = $37500

Net Income = $22800

Explanation:

Particulars                                       Amount

Net Sales                                        $300,000

Less: Cost of Goods Sold                $165,000

Gross Profit                                      $135,000

Less: Selling Expenses                    $66,000

Less: Research  expenses               $31,500

Operating Income                            $37,500

Less: Interest Expense                       $7,100

Earnings before Tax                        $30,400

Less: Taxes                                       $7,600

Net Income                                    $22,800