Selected information taken from the financial statements of Fordstar Co. for the year ended December 31, 2019, follows:

Net cash provided by operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,000Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,000Selling, general, and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,000Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000Research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000Merchandise inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,000Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,000Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000

a. Calculate income from operations (operating income) for the year ended December 31, 2019. (Hint: You may wish to review Exhibit 2-2.)

b. Calculate net income for the year ended December 31, 2019.

Exhibit 2-2

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MAIN STREET STORE INC. Income Statement For the Year Ended August 31, 2020 Net sales ... $1,200,000 Cost of goods sold 850,000 $ 350,000 Gross profit Selling, general, and administrative expenses 311,000 Income from operations 39,000 Interest expense 9,000 Income before taxes 30,000 12,000 Income taxes . 18,000 Net income %24 Earnings per share of common stock outstanding 24 1.80