Income from continuing operations before income tax…………………………………...

Income tax expense ($1,650,000 x 40%)……

Income form continuing operations…………

Gain on discounted operations, net of $66,000 in income taxes…………………….

Income before extraordinary item and the cumulative effect of a change in accounting principle……………………………………..

Extraordinary item: Loss due to flood, net of $28,000 in income tax saving……………….

Cumulative effect of changing to a different depreciation method, net of $112,000 in income tax savings………………………….

Net Income…………………………………..

$1,650,000

     660,000

$   990,000

        99,000

$1,089,000

      (42,000)

     (168,000)

$      879,000