Reference: 12-05
the Holmes Division Recorded Operating Data as Follows

question 66

Multiple Choice

Reference: 12-05
The Holmes Division recorded operating data as follows for the past year: $$\begin{array} { | l | r | } \hline \text { Sales } & \$ 200,000 \\\hline \text { Net operating income } & 25,000 \\\hline \text { Average operating assets } & 100,000 \\\hline \text { Stockholders' equity } & 80,000 \\\hline \text { Residual income } & 13,000 \\\hline\end{array}$$
-The net operating income in Year 1 was?

• A)$140,000.
• B)$150,000.
• C)$135,000.
• D)$90,000.

---

Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and net profit or loss.

Accounting Equation

A basic principle of accounting that represents the relationship between an entity's assets, liabilities, and owners' equity (Assets = Liabilities + Owners' Equity).

Accounts Payable

Obligations a company owes to its suppliers or creditors for goods and services received but not yet paid for.

Cash

Liquid currency and coins that are accepted as a medium of exchange for goods and services.