Question

Pandora Corporation operates several factories in the Midwest that manufacture consumer electronics. The December 31, 2018, year-end trial balance contained the following income statement items:

Account Title	Debits	Credits
Sales Revenue		12,500,000
Interest revenue		50,000
Loss on sale of investments	100,000
Cost of goods sold	6,200,000
Selling expenses	6,20,000
General & Administrative expenses	1,520,000
Interest expense	40,000
Research and development expense	1,200,000
Income tax expense	900,000

Calculate the company's operating income for the Year

 

Answer 1

Operating Income : Operating income covers income and costs directly tied to the company's principal income-generating operations. It's also referred to as operational profit or recurring profit.

Operating income = Sales Revenue - Cost of goods sold - other operating expenses

 

Calculation of Pandora Corporation operating income

Particulars	Amount$	Amount$
Sales Revenue		12,500,000
Less : Cost of goods sold	6,200,000
Selling expenses	6,20,000
General & Administrative expenses	1,520,000
Research & Development Expenses	1,200,000	9,540,000
Operating income		2,960,000

Therefore,Pandora Corporation Company income is $2,960,000