Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2018 2017 Sales $ 5,150,000 $ 4,250,000 Cost of goods sold 3,010,000 2,150,000 Administrative expenses 950,000 825,000 Selling expenses 510,000 462,000 Interest revenue 165,000 155,000 Interest expense 230,000 230,000 Loss on sale of assets of discontinued component 110,000 On July 1, 2018, 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, 2018, for $110,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 1/1/18-9/30/18 2017 Sales $ 550,000 $ 650,000 Cost of goods sold (365,000 ) (410,000 ) Administrative expenses (65,000 ) (55,000 ) Selling expenses (35,000 ) (45,000 ) Operating income before taxes $ 85,000 $ 140,000 In addition to the account balances above, several events occurred during 2018 that have not yet been reflected in the above accounts: A fire caused $65,000 in uninsured damages to the main office building. The fire was considered to be an infrequent but not unusual event. Inventory that had cost $55,000 had become obsolete because a competitor introduced a better product. The inventory was sold as scrap for $6,000. Income taxes have not yet been recorded.