The Davis Company has income from continuing operations of \(\$ 240,000\) for theyear ended December 31, 1998. It also has the following items (before considering in-come taxes): (1) an extraordinary fire loss of \(\$ 60,000\), (2) a gain of \(\$ 40,000\) from the dis-continuance of a division, which includes a \(\$ 110,000\) gain from the operation of the di-vision and a \(\$ 70,000\) loss on its disposal, and (3) a cumulative change in accountingprinciple that resulted in an increase in the prior year's depreciation of \(\$ 30,000\). Assumeall items are subject to income taxes at a \(30 \%\) tax rate.

InstructionsPrepare Davis Company's income statement for 1998, beginning with "Income from con-tinuing operations."