8. Calculating Operating Income

A company began operations at the start of Year 1.

During the year, it had cash sales of $50,000 and credit sales of $450,000. The company collected $420,000 in cash from the credit sales. The company purchased inventory costing $250,000 and paid $18,000 in dividends. The company incurred the following expenses:

Cost of goods sold	210,000	Rent expense	6,000
Salary expense	80,000	Depreciation expense	4,000
Interest expense	5,000	Income tax expense	57,000

Using this information, answer the following questions.

1. What would Operating Income on the Dec. 31, Year 1 Income Statement be reported as?
2. As of Dec. 31, Year 1, determine the ending balance in the Accounts Receivable
3. Determine Ending Retained Earnings as of December 31, Year 1