Selected information taken from the financial statements of Verbeke Co. for the year ended December 31, 2010, follows:
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $412,000
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,000
Net cash used by investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,000
Dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,000
Extraordinary loss from an earthquake, net of tax savings of $25,000 . . 61,000
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 741,000
Advertising expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,000
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01,000
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,000
Other selling expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,000
a. Calculate income from operations (operating income) for the year ended December 31, 2010.
b. Calculate net income for the year ended December 31, 2010.