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On January 1, 20X4, Morgan Inc., entered into a contractual agreement to sell all of the assets of its dry goods department, which met the criteria for classification as an operating segment. The sale occurred on December 31, 20X4, and resulted in a gain on disposal of $400,000. The department's operations resulted in losses before income tax of $225,000 in 20X4 and $125,000 in 20X3. For both years, Morgan's income tax rate is 30%, and the criteria for reporting a discontinued operation have been met. In a comparative statement of income for 20x4 and 20x3, how much gain or (loss) should Morgan report under the Discontinued Operations? $122,500 for 20x4 and ($87,500) for 20x3 $122,500 for 20X4 and $0 for 20x3 O ($157,500) for 20x4 and ($87,500) for 20x3 O ($157,500) for 20X4 and $0 for 20X3