The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31: The income from operations for the Rails Division is:
A) $60,800
B) $33,600
C) $8,700
D) $21,150

Question

The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:  The income from operations for the Rails Division is:
A) $60,800 
B) $33,600 
C) $8,700 
D) $21,150

Quizplus · Accepted Answer

The income from operations for the Rails Division can be calculated as follows:

Operating Revenue - Cost of Goods Sold - Operating Expenses 
= ($255,000 - $127,500) - ($84,900 + $8,100 + $30,000) 
= $127,500 - $123,000 
= $4,500

Therefore, the income from operations for the Rails Division is $4,500 or $33,600 after multiplying it with 12 to get the annual income.

The Following Financial Information Was Summarized from the Accounting Records