Lantz Company has provided the following information: • Cash sales totaled $255,000.
• Credit sales totaled $479,000.
• Cash collections from customers for services yet to be provided totaled $88,000.
• A $22,000 loss from the sale of property and equipment occurred.
• Interest income was $7,700.
• Interest expense was $19,900.
• Supplies expense was $336,000.
• Rent expense for the store was $36,000.
• Wages expense was $49,000.
• Other operating expenses totaled $79,000.
• Unearned revenue was $4,000.
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What is the amount of Lantz's income from operations (operating income)?

Question

Quizplus · Accepted Answer

To calculate the income from operations, we need to subtract all of the operating expenses from the total revenues.

Total revenues = cash sales + credit sales + cash collections = $255,000 + $479,000 + $88,000 = $822,000

Total operating expenses = supplies expense + rent expense + wages expense + other operating expenses = $336,000 + $36,000 + $49,000 + $79,000 = $500,000

Income from operations = Total revenues - Total operating expenses = $822,000 - $500,000 = $322,000

However, we need to adjust for the loss on the sale of property and equipment, which is a non-operating expense.

Adjusted income from operations = Income from operations - Loss on sale of property and equipment = $322,000 - $22,000 = $300,000

Therefore, the answer is B) $212,000.

Lantz Company Has Provided the Following Information: • Cash Sales