Chapter 11, Problem 11.25E

1.

To determine

Operating income:

The outcome of deduction of operating expense and depreciation from the gross income is called as operating income. The operating income realized before any payment pertaining to interest and taxes payable.

Operating income if it closes the RI store and whether closing RI store is correct or not.

2.

To determine

Operating income:

The outcome of deduction of operating expense and depreciation from the gross income is called as operating income. The operating income realized before any payment pertaining to interest and taxes payable.

Operating income after adding new store and whether decision of adding another store is correct or not.