The following condensed income statement of Ranger Corporation is presented for the two years ended December 31, 2016 and 2015:

	2016	2015
Net sales	$10,000,000	$9,000,000
Cost of sales	6,000,000	6,000,000
Gross profit	$ 4,000,000	$3,000,000
Operating expense	2,500,000	2,000,000
Operating income	$ 1,500,000	$1,000,000
Gain on sale of a component	900,000	--
	$ 2,400,000	$1,000,000
Income tax expense	720,000	300,000
Net income	$ 1,680,000	$ 700,000

On January 1, 2016, Ranger entered into an agreement to sell one of its separate operating divisions for $2,000,000. The sale resulted in a gain on disposition of $900,000 on November 12, 2016, and qualifies as a discontinued component. This division's contribution to Ranger's reported income before income taxes for each year was as follows:

2016	$700,000 loss
2015	$400,000 loss

Assume an income tax rate of 30%. Refer to Exhibit 5-1. In the preparation of a revised comparative income statement, Ranger should report under the caption "Discontinued Operations" for 2016 and 2015, respectively,

a loss of $700,000 and a loss of $400,000.

income of $200,000 and a loss of $400,000.

income of $140,000 and a loss of $0.

income of $140,000 and a loss of $280,000.