Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2013 2012 Sales Cost of goods sold Administrative expenses Selling expenses Interest revenue Interest expense Loss on sale of assets of discontinued component $4,900,000 $4,000,000 2,960,000 2,100,000 775,000 412,000 150,000 220,000 900,000 460,000 160,000 220,000 90,000 On July 1, 2013, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAP. The assets of the component were sold on September 30, 2013, for $90,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows 1/1/13-9/30/13 2012 Sales Cost of goods sold Administrative expenses Selling expenses $ 500,000 (340,000) (60,000) (30,000) $600,000 (380,000) (50,000) (40,000) Operating income before taxes $ 70,000 $ 130,000 In addition to the account balances above, several events occurred during 2013 that have not yet been reflected in the above accounts 1. A fire caused $60,000 in uninsured damages to the main office building. The fire was considered to be 2. An earthquake caused $110,000 in property damage to one of Reed's factories. The amount of the loss 3. Inventory that had cost $50,000 had become obsolete because a competitor introduced a better 4. Income taxes have not vet been accrued. an infrequent but not unusual event is material and the event is considered unusual and infrequent product. The inventory was sold as scrap for $4,000