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19 May, 02:23

During the year Sea Corporation reported gross income operations of $100,000 and operating expenses of $150,000. Sea Corporation also received dividend income of $90,000 from a domestic corporation in which Sea is a 20% shareholder.

What is the amount of Sea Corporation's net operating loss?

A. $32,000

B. $0

C. $23,000

D. $40,000

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Answers (1)
  1. 19 May, 03:34
    0
    The correct answer is A. $32,000.

    Explanation:

    Corporation's net operating profit/loss is calculated by subtracting all expenses incurred from all income/revenue earned during the period. However, income tax expense is not dedcuted to calculate net operating income.

    net operating loss = income from operations - operating expenses + dividend income

    net operating loss = 100,000 - 150,000 + (90,000 + 20%)

    = ($ 32,000)
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