Question

1. Refer to the Trump Company’s financial data below:

Other revenue (expense)	$ 80 000	General and
		administrative expense	$220 000
Dividends paid	$120 000	Operating revenues	$600 000
Selling expenses	$180 000	Income tax expense	$ 60 000

What is Trump Company's income from operations?

a.	$160 000
b.	$200 000
c.	$220 000
d.	$120 000

Answer 1

Income from Operations is calculated by subtracting Operating Expenses like Selling Expenses, General and Administrative Expenses, Depreciation Expenses and Amortization Expenses from Gross Profit or Revenue.

So Income from Operations of Trump Company is:-

Trump Company

Income Statement

For the Year Ended----

Accounts Title	Amount	Amount
Operating Revenues		$600,000
Less:- Operating Expenses:-
Selling Expenses	$180,000
General and Administrative Expenses	220,000
Total Operating Expenses		($400,000)
Income from Operations		$200,000

So Trump Company's Income from Operations is $200,000.

So the Answer is Option (b) $200,000.