Calculate income from operations and net income Selected information taken
from the financial statements of Verbeke Co. for the year ended December 31, 2010,
follows:
Gross profit | $412,000 |
General and administrative expenses | 83,000 |
Net cash used by investing activities | 106,000 |
Dividends paid | 51,000 |
Extraordinary loss from an earthquake, net of tax savings of $25,000 | 61,000 |
Net sales | 741,000 |
Advertising expense | 76,000 |
Accounts payable | 101,000 |
Income tax expense | 83,000 |
Other selling expenses | 42,000 |
a. Calculate income from operations (operating income) for the year ended December 31, 2010. (Hint: You may wish to review Exhibit 2-2.)
b. Calculate net income for the year ended December 31, 2010.
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