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, 2010. The 2010 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 2010, 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.
Prepare a condensed income statement.