Lane Inc., an electing S corporation, realizes $150,000 from sales during the current year. Lane also receives $20,000 of dividends from a 3% owned corporation. Operating expenses total $155,000. Lane's operating income is
A)$(19,000)
B)$( 5,000)
C)$1,000
D)$4,500
E)$15,000

Question

Quizplus · Accepted Answer

To find the operating income of Lane, we need to subtract the operating expenses from the sales revenue. 
Operating Income = Sales Revenue - Operating Expenses 
= $150,000 - $155,000 
= $(5,000) 
Therefore, the answer is B) $(5,000).

Lane Inc, an Electing S Corporation, Realizes $150,000 from Sales During