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ssly appeane he Institute P 4-2 Discontinued operations LO4-4 The following condensed income statements of the Jackson Holding Company are presented for the two years ended December 31, 2016 and 2015 wwledge and 2 statemets 2016 2015 Sales $15,000,000 9,200,000 $9,600,000 6,000,000 Cost of goods sold ag operation Gross profit Operating expenses Operating income Gain on sale of division 5,800,000 3,200,000 3,600,000 2,600,000 2,600,000 600,000 1,000,000 3,200,000 1,000,000 400,000 Income tax expense 1,280,000 eoperating Net income $ 1,920,000 $ 600,000 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 $5,000,000. Book value of the division's assets was $4,400,000. The division's contribution to Jack- son's operating income before-tax for each year was as follows: 2016 2015 $400,000 loss $300,000 loss Assume an income tax rate of 40% nect Required: 1. Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before income taxes. Ignore EPS disclosures 2. Assume that by December 31, 2016, the division had not yet been sold but was considered held for sale. The fair value of the division's assets on December 31 was $5,000,000. How would the presentation of discontin- ued operations be different from your answer to requirement 1? 3. Assume that by December 31, 2016, the division had not yet been sold but was considered held for sale. The fair value of the division's assets on December 31 was $3,900,000. How would the presentation of discontin- ued operations be different from your answer to requirement 1 accous he compary 00