Cool Cruise Lines, Inc., reported the following income statement for the year ended December 31, 2014:

Millions

Operating revenues ……………………………………………………… $ 95,500

Operating expenses ……………………………………………………… 84,100

Operating income………………………………………………………… 11,400

Other revenue (expense), net …………………………………………. 1,000

Income from continuing operations………………………………… 12,400

Discontinued operations, net of tax………………………………… 1,100

Net income…………………………………………………………………. $ 13,500

Requirements
1. Were Cool Cruise Line’s discontinued operations more like an expense or revenue? How can you tell?
2. Should the discontinued operations of Cool Cruise Lines be included in or excluded from net income? State your reason.
3. Suppose you are working as a financial analyst and your job is to predict Cool Cruise Line’s net income for 2015 and beyond. Which item from the income statement will you use for your prediction? Identify its amount. Why will you use this item?

Cool Cruise Lines Inc reported the following income statement for



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