Reference no: EM131776071

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The following condensed income statements of the Jackson Holding Company are presented for the two years ended December 31, 2016 and 2015:

		2016		2015
Sales	$	15,600,000	$	10,200,000
Cost of goods sold		9,500,000		6,300,000
Gross profit		6,100,000		3,900,000
Operating expenses		3,440,000		2,840,000
Operating income		2,660,000		1,060,000
Gain on sale of division		660,000		-
		3,320,000		1,060,000
Income tax expense		996,000		318,000
Net income	$	2,324,000	$	742,000

On October 15, 2016, Jackson entered into a tentative agreement to sell the assets of one of its divisions. The division qualifies as a component of an entity as defined by GAAP. The division was sold on December 31, 2016, for $5,180,000. Book value of the division's assets was $4,520,000. The division's contribution to Jackson's operating income before-tax for each year was as follows:

2016	$430,000	loss
2015	$330,000	loss