Problem 18-8A Violet Bick Corporation

Violet Bick Corporation owns a number of cruise ships and a chain of hotels. The hotels, which have not been profitable, were discontinued on September 1, 2012. The 2012 operating results for the company were as follows.

Operating revenues $12,880,200Operating expenses 8,713,400Operating income $ 4,166,800

Analysis discloses that these data include the operating results of the hotel chain, which were: operating revenues $1,954,700 and operating expenses $2,343,600. The hotels were sold at a gain of $185,100 before taxes. This gain is not included in the operating results. During the year, Violet Bick suffered an extraordinary loss of $806,100 before taxes, which is not included in the operating results. In 2012, the company had other revenues and gains of $143,800, which are not included in the operating results. The corporation is in the 32% income tax bracket.

Prepare a condensed income statement.

VIOLET BICK CORPORATION

Condensed Income Statement

For the Year Ended December 31, 2012

 Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues $ Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Expenses and LossesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues  Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues  Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues  Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues  Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income /(Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues  Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues  Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues   Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues$  Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues    Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues  Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues   Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues  Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Sale of HotelsIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome From OperationsIncome Tax ExpenseLoss from Operations of Hotel ChainNet Income / (Loss)Operating ExpensesOperating RevenuesOther Revenues and GainsRetained EarningsTotal ExpensesTotal Operating ExpensesTotal Revenues $