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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
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 on sale of division $15,100,000 $9,700,000 9,250,000 6,050,000 5,850,000 3,650,000 3,240,000 2,640, 000 2,610,000 1,010,000 610,000 3,220,000 1,010,000 1,288,000404,000 $ 1,932,000 $ 606,000 Income tax expense Net income 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 $5,030,000. Book value of the division's assets was $4,420,000. The division's contribution to Jackson's operating income before-tax for each year was as follows 2018 $405,000 2017 $305,000 Assume an income tax rate of 40%
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