Atlantic Airlines operated both an airline and several motels located near airports. During the year just ended, all motel operations were discontinued and the following operating results were reported:
Continuing operations (airline): Net sales $ 57,000,000 Costs and expenses (including income taxes on continuing operations) 42,600,000 Other data: Operating income from motels (net of income tax) 840,000 Gain on sale of motels (net of income tax) 4,956,000 Extraordinary loss (net of income tax benefit) 3,360,000
The extraordinary loss resulted from the destruction of an airliner by an earthquake. Atlantic Airlines had 1,000,000 shares of capital stock outstanding throughout the year.
a. Prepare a condensed income statement, including proper presentation of the discontinued motel operations and the extraordinary loss. Include all appropriate earnings per share figures.
