Find the entry you would make on an income statement for TOTAL OPERATING EXPENSES for the year ended December 31, 2011: Gross Sales, $141,000; Sales Returns and Allowances, $7,600; Sales Discounts, $9,600; Merchandise Inventory, January 1, 2011, $50,300; Merchandise Inventory, December 31, 2011, $42,400; Net Purchases, $62,100; Freight In, $1,000; Salaries, $80,500; Rent, $18,900; Utilities, $1,225; Insurance, $2,250; and Income Tax, $17,400.
A) $71,000
B) $102,875
C) $120,275
D) $123,800

Question

Quizplus · Accepted Answer

Total Operating Expenses are calculated by adding up all the operational costs. These include Salaries, Rent, Utilities, and Insurance, but exclude Income Tax as it is not an operating expense. Therefore, the total is $80,500 (Salaries) + $18,900 (Rent) + $1,225 (Utilities) + $2,250 (Insurance) = $102,875.

Find the Entry You Would Make on an Income Statement