Comparative income statements for Grammar Inc. are as follows:

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The president and management believe that the company performed better in 2010 than it did in 2009. Write the president€™s letter to be included in the 2010 annual report. Explain why the company is financially sound and why shareholders should not be alarmed by the $20,000 loss in a year when operating revenues increased significantly. Multi-ConceptProblems

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Sales Cost of sales Gross profit Operating expenses Operating income Loss on sale of subsidiary Net income (loss) $1,000,000 500,000 S 500,000 120,000 $ 380,000 (400,000) S (20,000) $500,000 300,000 $200,000 100,000 $100,000 $100,000