Charles Corporation has several operations in the Caribbean Islands (Jamaica, Trinidad, Barbados and St. Lucia). The restructuring of its organization in November, 2016 has led to the decision of getting rid of its Barbados operation.

In preparing its financial statements of December 31, 2016, the following information was made available.

1. Barbados Operation incurred a loss of $262,500. for the year ended December 31, 2016,

Including $225,000 for the period January 1, to November 20, 2016

2. The estimated cost to sell is $200,000
3. Barbados Operations fair value of assets is estimated at $6 million and the carrying value is $6.25M.
4. Barbados income tax rate is 40%
5. It is estimated that Barbados operations will lose an additional $250,000 before it is sold

Required:

1. Barbados division qualifies for reporting as a discontinued operation. What amount should be reported in the discontinued operations section of Charles 2016 income statement?.
2. In early 2017, Barbados operation is sold for $7.5 million and the actual cost to sell is $300,000. Additional income tax expense related to the sale is $400,000. The division lost $100,000 before it was sold. What amount should be shown in Charles 2017 income statement?.

Please explain it in detail