Porches, Inc. sells lawn furniture. Selected financial information for the most recent year is as follows:Beginning merchandise inventory on January 1 was $33,200. Ending merchandise inventory on December 31 was $35,000. Purchases during the year were $92,000. Selling and administrative expenses were $75,700. Sales for year were $262,900. What was operating income for the year?

The operating income for the year is $97,000

Explanation:

For computing the operating income, first, we have to calculate the cost of goods sold. The formula to compute the cost of good sold is shown below:

= Beginning merchandise inventory + Purchases during the year - Ending merchandise inventory

= $33,200 + $92,000 - $35,000

= $90,200

Now, the operating income would be

= Sales - the cost of good sold - selling and administrative expenses

= $262,900 - $90,200 - $75,700

= $97,000