Wildhorse Manufacturing Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $139,800 and the following divisional results:

		Division
		I		II		III		IV
Sales		$504,000		$393,000		$313,400		$175,700
Cost of goods sold		297,000		241,800		273,200		151,800
Selling and administrative expenses		67,400		74,400		66,800		73,900
Income (loss) from operations		$139,600		$76,800		$(26,600)		$(50,000)

The analysis reveals the following percentages of variable costs in each division:

		I			II			III			IV
Cost of goods sold		70%			92%			74%			92%
Selling and administrative expenses		39			50			65			70

Discontinuance of any division would save 50% of the fixed costs and expenses for that division. Top management is very concerned about the unprofitable divisions (III and IV). The consensus is that the company should discontinue one or both of these divisions.

(c) Prepare a condensed income statement in columns for Ribeiro Manufacturing, assuming division IV is eliminated. Use the CVP format. Division IV's unavoidable fixed costs are allocated equally to the continuing divisions. (d) Reconcile the total income from operations of ($145,000) with the total income from operations without division IV.