Question

Selling. general, and administrative expenses were $80,000, net sales were $390,000, interest expense was $16.000: research and development expenses were $34,000, net cash provided by operating activities was $42,000; income tax expense was $10,000, cost of goods sold was $220,000. Operating income for the period was:
a. $98,000
b. $56.000
c. $30.000
d. $10000

Answer 1

Answer:

The correct answer is C. US$ 30,000

Explanation:

1. What was the operating income for the period?

Operating income = Net sales - Cost of goods - Operational expenses

Operational expenses on this question are:

1. Selling. general, and administrative expenses
2. Interest expenses
3. Research and development expenses
4. Income tax expense

According to the information provided, we have then:

Operating income = 390,000 - 220,000 - 80,000 - 16,000 - 34,000 - 10,000

Operating income = 390,000 - 360,000

Operating income = 30,000

The correct answer is C. US$ 30,000