Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2021 2020 $4,400,000 $3,500,000 2,860,000 2,000,000 800,000 675,000 360,000 302,000 150,000 140,000 200,000 200,000 48,000 On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2021, for $48,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 1/1/2021-9/30/2021 2020 Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes $ 400,000 (290,000) (50,000) (20,000) $ 500,000 (320,000) (40,000) (20,000) $ 40,000 $ 120,000 In addition to the account balances above, several events occurred during 2021 that have not yet been reflected in the above accounts: 1. A fire caused $50,000 in uninsured damages to the main office building. The fire was considered to be an unusual event. 2. Inventory that had cost $40,000 had become obsolete because a competitor introduced a better product. The inventory was written down to its scrap value of $5,000. 3. Income taxes have not yet been recorded.