P14-8A Cheaney Corporation owns a number of cruise ships and a chain of
hotels. The hotels, which have not been profitable, were discontinued on
September 1, 2008. The 2008 operating results for the company were as
follows.
Operating revenues $12,850,000
Operating expenses 8,700,000
Operating income $ 4,150,000
Analysis discloses that these data include the operating results of the
hotel chain, which were: operating revenues $2,000,000 and operating
expenses $2,400,000. The hotels were sold at a gain of $200,000 before
taxes. This gain is not included in the operating results. During the
year, Cheaney suffered an extraordinary loss of $800,000 before taxes,
which is not included in the operating results. In 2008, the company had
other revenues and gains of $100,000, which are not included in the
operating results. The corporation is in the 30% income tax bracket.
Instructions
Prepare a condensed income statement.
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