Discontinued Operations
Jason Bond Company operates two restaurants, one in Valencia and one in Saugus. The operations and cash flows of each of the two restaurants are clearly distinguishable. During 2008, Jason Bond decided to close the restaurant in Saugus and sell the property; it is probable that the disposal will be completed early next year. The revenues and expenses of Jason Bond for 2008 and for the preceding two years are as follows:
|
|
2008 |
2007 |
2006 |
|
Sales—Valencia |
$60,000 |
$48,000 |
$40,000 |
|
Cost of goods sold—Valencia |
26,000 |
22,000 |
18,000 |
|
Other expenses—Valencia |
14,000 |
13,000 |
12,000 |
|
Sales—Saugus |
23,000 |
30,000 |
52,000 |
|
Cost of goods sold—Saugus |
14,000 |
19,000 |
20,000 |
|
Other expenses—Saugus |
17,000 |
16,000 |
15,000 |
The other expenses do not include income tax expense. During the later part of 2008, Jason Bond sold much of the kitchen equipment of the Saugus restaurant and recognized a pretax gain of $15,000 on the disposal. The income tax rate for Jason Bond is 35%. Prepare the 3 year comparative income statement for 2006–2008.