My instructor told us that for this problem we dont consider net cash provided b

Question

My instructor told us that for this problem we dont consider net cash provided by operations or accounts payable...that they dont belong on income statement..and provision of income is just an expense

P4-20 Calculate income from operations and net income [LO 6, 7]

Selected information taken from the financial statements of Fordstar Co. for the year ended December 31, 2010, follows:

Calculate income from operations (operating income) for the year ended December 31, 2010. (Omit the "$" sign in your response.)

Calculate net income(loss) for the year ended December 31, 2010. (Input the amount as positive value. Omit the "$" sign in your response.)

Selected information taken from the financial statements of Fordstar Co. for the year ended December 31, 2010, follows:

Explanation / Answer

Statement showing calculations of net income for the yr ended 31/12/2010

(amount in $)

Net sales : 183500

(-) Cost of goods sold : 65500

selling , Distribution & admin exp : 22500

interest expenses : 20500

Operating income : 75000

(-) R&D expenses : 13500

Loss from Discontinuing Operations : 22000

Extraordinary loss from Hurricane : 31500

Net Income(loss) before tax provision : 8000

(-) income tax provision : 8500

net income (Net loss) after tax : (500)

Note: accounts payable and cash provided by operations are not part of income statement.

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