Comparative income statements for Thesaurus Inc. are as follows:

Required
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 reduction in income in a year when operating revenues increased significantly.

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2010 2009 Operating revenues Operating expenses Operating income Gain on the sale of subsidiary Net income $500,000 120,000 $380,000 $200,000 100,000 $100,000 400,000