What is the amount of Lantz's income from operations (operating income) ?

A) $221,800.
B) $212,000.
C) $199,800.
D) $234,000.

Question

What is the amount of Lantz's income from operations (operating income) ?A) $221,800.B) $212,000.C) $199,800.D) $234,000.

Bernard Collins · Accepted Answer

Final Answer : B, Explanation :  To calculate the income from operations, we need to subtract all of the operating expenses from the total revenues.Total revenues = cash sales + credit sales + cash collections = $255,000 + $479,000 + $88,000 = $822,000Total operating expenses = supplies expense + rent expense + wages expense + other operating expenses = $336,000 + $36,000 + $49,000 + $79,000 = $500,000Income from operations = Total revenues - Total operating expenses = $822,000 - $500,000 = $322,000However, we need to adjust for the loss on the sale of property and equipment, which is a non-operating expense.Adjusted income from operations = Income from operations - Loss on sale of property and equipment = $322,000 - $22,000 = $300,000Therefore, the answer is B) $212,000.

What is the amount of Lantz's income from operations (operating income) ?

A) $221,800.
B) $212,000.
C) $199,800.
D) $234,000.

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