Tthe following information is available from the Accounting records of Manahan C

Question

Tthe following information is available from the Accounting records of Manahan Co. for year end December 31, 2007.

Net cash provided by financing activities.............................$112,000
Dividends paid...............................................................18,000
Extraordinary loss from flood, net of tax savings of $35,000.........105,000
Income tax expenses........................................................26,000
Net sales.....................................................................644,000
Advertising expense........................................................ 45,000
Accounts receivable.........................................................62,000
Cost of goods sold..........................................................368,000
General and Administrative expenses....................................143,000

a) calculate the operating income for Manahan Co for year ended December 31, 2007
b) calculate the Company's net income for 2007.

Explanation / Answer

Operating income is Net Sales- Cost of goods sold- operating expenses. So here we have 644,000- 368,000-45,000-143,000= 88,000. Net Income is 88,000- 26,000-105,000= (43,000).

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