Question

Porches, Inc. sells lawn furniture. Selected financial information for the most recent year is as​ follows: Beginning merchandise inventory on January 1 was $ 33 comma 100. Ending merchandise inventory on December 31 was $ 35 comma 400. Purchases during the year were $ 92 comma 800. Selling and administrative expenses were $ 75 comma 700. Sales for year were $ 262 comma 900. What was operating income for the​ year?

Answer 1

Operating Loss: -3,200

Step-by-step explanation:

1 - First, let's calculates the cost of goods sold:

Cost of Sold Good: Beginning inventory + Purchases - Ending inventory

Cost of Sold Good: 133,100 + 92,800 - 35,400

Cost of Sold Good: 190,500

2 - Then we can calculated the Operating Income:

Operating Income: Sales - Cost of Sold Good - Selling and administrative expenses

Operating Income: 262,900 - 190,500 - 75,700

Operating Income: - 3,300

We will call it Operating Loss because is negative. The company expends more than its sales.

Operating Loss: -3,300