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1. Woodway Company’s annual report contained the following data (dollars in mil- lions) on its income statement
Interest expense $ 2,489
Investment income 11,218
Other income 9,033
Depreciation 1,257
Revenues 591,762
Other expenses 8,482
Cost of sales 482,355
Operating expenses 98,576

1. Income taxes 522
3. 
   
4. Required
   a. Prepare an income statement using a multiple-step 

b. Revise your income statement (from part a above) to include the following two additional items from Woodway’s annual report (dollars in millions):
Loss on discontinued operations, net of tax $1,025
Extraordinary loss, net of tax 314
Interpreting Financial Statements

2  The Woodway Company included the following note in its 2000 annual report:

1. In June 2000, Woodway Company and its principle subsidiaries filed for protec- tion under Chapter 11 of the United States Bankruptcy Code. Woodway recorded a provision for possible impairment of $24 million at December 31, 1999, and recorded an additional provision of $19 million in the second quarter of 2000.
2. 
   
3. Required
   a. Do you think that this $19 million loss should be reported on Woodway’s 2000 income statement? Why or why not?
4. b. Based on the data in question 1 and 2 what estimate would you make regarding Woodway’s adjusted income (sustainable operating profit or sus- tainable earnings)?

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