The Davis Company has income from continuing operations of \(\$ 240,000\) for the year ended December 31, 1995. It also has the following items (before considering income taxes): (1) an extraordinary fire loss of \(\$ 60,000\), (2) a gain of \(\$ 40,000\) from the discontinuance of a division, which includes a \(\$ 110,000\) gain from the operation of the division and a \(\$ 70,000\) loss on its disposal, and (3) a cumulative change in accounting principle that resulted in an increase in prior year's depreciation of \(\$ 30,000\). Assume all items are subject to income taxes at a \(30 \%\) tax rate.

\section*{Instructions}

Prepare Davis Company's income statement for 1995, beginning with "Income from continuing operations."