Question

Consider the following totals: Revenues = $100,000; Operating costs and expenses = $45,000; Other revenues = $5,000; Income taxes = $18,000; Net income = $42,000. What was the total of operating income?

Answer 1

Answer:

$55,000

Explanation:

The operating income of any entity can be calculated using the following formula:

Operating income=Net income+ income tax expense+ finance cost- other revenues

Net income in this question=$42,000

Income taxes=$18,000

finance cost=0

Other revenues=$5000

Operating income=$42,000+$18,000+0-$5000=$55,000

The operating income of any entity can also be calculated using the following formula:

Operating income=Revenues-operating costs

                             =$100,000-$45,000=$55,000