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Smith Corporation has provided the following information:
Cash sales totaled $135,000.
Credit sales totaled $289,000.
Cash collections from customers for services yet to be provided totaled $48,000.
An $10,000 gain from the sale of property and equipment occurred.
Interest income totaled $8,700.
How much of these items were included in operating income?
$434,000
$490,700
$432,700
$472,000
Expert Answer
| S.No | Particulars | Amount |
| (a) | Cash Sales | $ 135,000 |
| (b) | Credit Sales | $ 289,000 |
| (c) | Gain from the sale of property and equipment | $ 10,000 |
| (d) | Operating Income [(a) + (b) + (c)] | $ 434,000 |
Therefore, the right option is (a) $ 434,000.
Note: Cash collected from customers for services yet to be provided and Interest Income shall not form part of Operating Income. Hence, same have been ignored.
