The Portland Division's operating data for the past two years is as follows:

The Portland Division's margin in Year 2 was 150% of the margin for Year 1.

-The net operating income for Year 1 was:
A)$192,000
B)$128,000
C)$266,667
D)$208,000

Question

The Portland Division's operating data for the past two years is as follows:

The Portland Division's margin in Year 2 was 150% of the margin for Year 1.

-The net operating income for Year 1 was:
A)$192,000 
B)$128,000 
C)$266,667 
D)$208,000

Quizplus · Accepted Answer

The net operating income is calculated by subtracting expenses from gross rental income. In this case, we are given the gross rental income of $320,000 and the total expenses of $192,000. Therefore, the net operating income for Year 1 would be:

$320,000 - $192,000 = $128,000

Therefore, the best choice is B, as it is the only option that matches the calculation for net operating income.

The Portland Division's Operating Data for the Past Two Years