The following condensed income statements of the Jackson Holding Company are presented for the two years ended December 31, 2018 and 2017: 2018 2017 Sales Cost of goods sold Gross profit Operating expenses Operating income Gain onsale of division $15,900,000 $10, 500,000 9,650,000 6,450,000 6,250,000 4,050,000 3,560,000 2,960,000 2,690,000 1,090,000 690,000 Income tax expense Net income 3,380,000 1,090,000 1,014,000 327,000 $ 2,366,000 763,000 On October 15, 2018, Jackson entered into a tentative agreement to sell the assets of one of its divisions The division qualifies as a component of an entity as defined by GAAP. The division was sold on December 31, 2018, for $5,270,000. Book value of the division's assets was $4,580,000. The division's contribution to Jackson's operating income before-tax for each year was as follows 2018 $445,000 2017 $345,000 Assume an income tax rate of 30%