Question

LeGrand Corporation reported the following amounts in its income statement: Sales revenue $ 440,000 Advertising expense 60,000 Interest expense 10,000 Salaries expense 55,000 Utilities expense 25,000 Income tax expense 45,000 Cost of goods sold 180,000 What was LeGrand's operating income?

Answer 1

Answer:

$65,000

Explanation:

Operating income is the amount left after the deduction of the operating expenses from the gross income. The gross income is the difference between sales and cost of goods sold.

As such, operating income is the difference between the sales and the sum of cost of goods sold and operating expenses.

Operating expenses

= $440,000 - $180,000 - $60,000 - $10,000 - $25,000 - $55,000 - $45,000

= $65,000