Caldwell Corporation operates an ice cream processing plant and uses the FIFO inventory cost flow assumption. A partial income statement for the year ended December 31, 2008 follows:

Caldwell’s physical inventory levels were virtually constant throughout 2008. The FIFO dollar amount ofi nventory at January 1, 2008 was \($60,000,000\). During 2008, the Consumer Price Index (an index of overall average purchasing power for typical urban-dwelling consumers)
increased by 4%.
Caldwell Corporation’s largest competitor, Cohen Confections, uses LIFO for inventory accounting.
Excerpts from its December 31, 2008 inventory footnote were:

The difference between the LIFO inventory amounts and the replacement cost of the inventory at December 31, 2008 and 2007, respectively, was \($18,000,000\) and \($12,000,000\). A LIFO liquidation occurred in 2008, which increased the reported gross margin by $1,000,000.
Required:
Using the preceding information, what is the best estimate of the amount of realized holding gains (or inventory profits) included in Caldwell Corporation’s income before taxes?

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Caldwell Corporation Statement of Income For the Year Ended December 31, 2008 Sales revenues $680,000,000 Cost of goods sold 360,000,000 Gross margin 320,000,000 SG&A expenses 200,000,000 Income before taxes $120,000,000