Question

The following information is available from the accounting records of Manahan Co. for the year ended December 31, 2019: Net cash provided by financing activities $ 168,000 Dividends paid 27,000 Loss from discontinued operations, net of tax savings of $70,000 155,000 Income tax expense 39,000 Other selling expenses 20,000 Net sales 966,000 Advertising expense 67,000 Accounts receivable 186,000 Cost of goods sold 552,000 General and administrative expenses 214,000 Required: a. Calculate the operating income for Manahan Co. for the year ended December 31, 2019.

Answer 1

See below

Step-by-step explanation:

1. Operating income for Manahan

Net sales

$966,000

Less:

Cost of goods sold

($552,000)

Gross profit

$444,000

Less:

Expenses

Selling, general and administrative

($214,000)

Other selling expenses

($20,000)

Advertising expenses

($67,000)

Operating income

$143,000

2. Computation of net income

Operating income

$143,000

Less;

Income tax expense

($39,000)

Income from continuing operations before taxes

$104,000

Less:

Income from discontinuing operations, net of savings

$70,000 ($155,000)

Net loss

($51,000)