During August, 2010, Joe's Supply Store generated revenues of $30,000. The company's expenses were as follows: cost of goods sold of $12,000 and operating expenses of $2,000. The company also had rent revenue of $500 and a gain on the sale of a delivery truck of $1,000.
Joe's operating income for the month of August, 2010 is

Question

Quizplus · Accepted Answer

Operating income is calculated as total revenues from operations minus operating expenses. Here, operating revenues are $30,000 and operating expenses are $12,000 (cost of goods sold) + $2,000 (operating expenses), resulting in an operating income of $16,000. Rent revenue and gain on sale are not included in operating income.

During August, 2010, Joe's Supply Store Generated Revenues of $30,000