Smith Corporation has provided the following information: Cash sales totaled $125,000.
Credit sales totaled $279,000.
Cash collections from customers for services yet to be provided totaled $38,000.
An $11,000 gain from the sale of property and equipment occurred.
Interest income totaled $7,700.
How much of these items were included in operating income?
A)$415,000.
B)$411,700.
C)$442,000.
D)$460,700.

Question

Quizplus · Accepted Answer

Operating income includes cash sales and credit sales, totaling $125,000 + $279,000 = $404,000. The gain from the sale of property and equipment and interest income are not included in operating income. Cash collections for services yet to be provided are also not included as they are unearned revenue.

Smith Corporation Has Provided the Following Information: Cash Sales Totaled