Question

During the year ended December 31, 2021, Halo had sales of $3,000, cost of goods sold of $1,200, and sales, general and administrative expenses of $200. In addition, Halo is involved in a restructuring process expected to last several years, and incurred restructuring costs in 2021 of $100. During the year the company also sold various investments for a net pre-tax loss of $60, and received $40 in dividends from investments. In addition, it incurred $50 of loss on inventory write-down due to obsolescence. What amount of operating income and nonoperating income/expenses will Halo present in its 2021 income statement? Operating income: $1,390; Nonoperating income: $40. Operating income: $1,450; Nonoperating expenses: $20. Operating income: $1,500; Nonoperating expenses: $70. Operating income: $1,600; Nonoperating expenses: $170.

Answer 1

Particulars Operating Income Non- Operating Income Sales Revenue Less: Cost of goods sold Less: Selling and administrative goods Operating Income 3,000 (1,200) (200) 1,600 Restructuring costs Loss on sale of investments Dividend on investments Loss on inventory write-down due to obsolescenec Non-Operating expenses (100) (60) 40 (50) (170) Answer is Operating Income $ 1,600 and Non-Operating expenses $ 170