P15-8 Cheaney Corporation owns a number of cruise ships and a chain of hotels.The hotels,

Price: $2.50


P15-8 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