The following information is available from the accounting records of Spenser Co. for the year ended December 31, 2019: Selling, general, and administrative expenses $ 106,000 Accounts payable 170,000 Research and development expenses 77,000 Loss from discontinued operations, net of tax savings of $8,000 24,000 Provision for income taxes 35,000 Net sales 948,000 Interest expense 97,000 Net cash provided by operations 296,000 Cost of goods sold 521,000 Required: a. Calculate the operating income for Spenser Co. for the year ended December 31, 2019.

A. Operating income $244,000

B Net income $88,000

Explanation:

Spenser Co.

Operating Income Statement

For the year ended December 31, 2019

Net sales 948000

Cost of goods sold (521000)

Gross profit 427000

Expenses:

Selling, general, and administrative expenses(106000)

Research and development expense(77000)

(183000)

Operating income(427000 -183000) 244000

b

Operating income244000

Interest expense(97000)

Income from continuing operations before taxes147000

Provision for income taxes(35000)

Income from continuing operations112000

Loss from discontinued operations, net of tax savings of $8,000(24000)

Net income for 2019 88,000

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