The Callie Company has provided the following information: Operating expenses were $231,000;
Cost of goods sold was $376,000;
Net sales were $940,000;
Interest expense was $32,000;
Gain on sale of investments was $76,000;
Income tax expense was $151,000.
What was Callie's income from operations (operating income)?
A)$188,000.
B)$333,000.
C)$156,000.
D)$232,000.

Question

Quizplus · Accepted Answer

Operating income (income from operations) can be calculated by subtracting operating expenses and cost of goods sold from net sales: 
$940,000 - $231,000 - $376,000 = $333,000 
Note that interest expense, gain on sale of investments, and income tax expense are not included in the calculation of operating income.

The Callie Company Has Provided the Following Information: Operating Expenses