To follow is the 2018 income statement of Kurzic Imports, Inc.

1. How much gross profit did Kurzic earn on the sale of its products in 2018? How much was income from continuing operations? How much net income did the company earn?

2. At the end of 2018, what dollar amount of income would most sophisticated investors use to predict Kurzic’s net income for 2019 and beyond? Name this item, give its amount, and state your reason.

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A1 B Kurzic Imports, Inc. Consolidated Statement of Operations (Adapted) 1 Year Ended 2 3 (In thousands except per share amounts) 4 5 Net sales 6 Operating costs and expenses: 7 Cost of sales (including buying and store occupancy costs) 8 Selling, general, and administrative expenses 9 Depreciation and amortization 10 Total operating costs and expenses 11 2018 2017 $ 1,806,092 $ 1,825,975 1,045,880 526,060 48,750 1,620,690 185,402 1,121,690 549,850 55,675 1,727,215 98,760 Operating income (loss) 12 Nonoperating (income) and expenses: 13 Interest and investment income 14 Interest expense 15 Interest income, net 16 Income (loss) from continuing operations before income taxes 17 Provision (benefit) for income taxes 18 Income (loss) from continuing operations 19 Discontinued operations: 20 Income (loss) from discontinued operations 21 Net income (loss) (2,740) 1,640 (1,100) 186,502 69,315 $117,187 $ (2,675) 1,725 (950) 99,710 34,700 65,010 210 $117,397 $ (2,300) 62,710 22 1.52 $ 23 Earnings (loss) per share from continuing operations: Basic 24 25 Earnings (loss) per share from discontinued operations: Basic 26 0.85 0.00 $ (0.03) 27 Earnings (loss) per share: Basic 28 1.52 $ 0.83