Chapter 4, Problem 4.1E

Operating versus Nonoperating Income

• LO4–1

Pandora Corporation operates several factories in the Midwest that manufacture consumer electronics. The December 31, 2018, year-end trial balance contained the following income statement items:

Account Title	Debits	Credits
Sales revenue		12,500,000
Interest revenue		50,000
Loss on sale of investments		100,000
Cost of goods sold		6,200,000
Selling expenses		620,000
General and administrative expenses		1,520,000
Interest expense		40,000
Research and development expense		1,200,000
Income tax expense		900,000

Required:

Calculate the company’s operating income for the year.