The Nellie Company has provided the following information: Operating expenses were $115,000;
Gross profit was $629,000;
Cost of goods sold was $470,000;
Interest expense was $17,000;
Extraordinary loss was $29,000;
Income tax expense was $199,000.
What was Nellie's operating income?
A) $514,000.
B) $468,000.
C)$497,000.
D)$298,000.

Question

Quizplus · Accepted Answer

Operating income is calculated as gross profit minus operating expenses. In this case, gross profit is $629,000 and operating expenses are $115,000, so operating income is $629,000 - $115,000 = $514,000.

The Nellie Company Has Provided the Following Information: Operating Expenses