Use the Appropriate Information from the Data Provided Below to Calculate

question 26

Essay

Use the appropriate information from the data provided below to calculate operating income for the year ended December 31, 2020.
$$\begin{array} { l r } \text { Cost of goods sold } & \$ 234,000 \\\text { General and administrative expenses } & 96,000 \\\text { Net cash provided by financing activities } & 138,000 \\\text { Dividends paid } & 32,000 \\\text { Income tax expense } & 22,000 \\\text { Other selling expenses } & 52,000 \\\text { Net sales } & 556,000 \\\text { Advertising expense } & 78,000 \\\text { Accounts payable } & 66,000\end{array}$$

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Definitions:

Payback Period

The length of time it takes for an investment to generate enough cash flow to recover the initial outlay, used in capital budgeting to estimate the viability of projects.

Investment Project

A project undertaken by a business or individual involving the allocation of capital resources to increase future earnings.

Straight-Line Depreciation

A method of calculating the depreciation of an asset, where the asset's cost is reduced equally over its useful life.

Payback Period

The length of time it takes for an investment to generate enough cash flow to recover its original cost, a measure of investment risk.