Chapter 4, Problem 4.1E

To determine

Operating income: Operating income includes incomes and expenses directly related to primary income generating activities of the company.  It is also known as “Operating profit” or “Recurring profit”. It is calculated by using the following formula:

$\text{Operating income = }\left(\begin{array}{l}\text{Sales revenue}-\text{Cost of goods sold}\\ -\text{Other operating expenses}\end{array}\right)$

To calculate: Company P’s operating income for the year.