[The following information applies to the questions displayed below.] On September 1, 2018, Jacob Furniture Mart enters into a tentative agreement to sell the assets of its office equipment division. This division qualifies as a component of the entity according to GAAP regarding discontinued operations. The division's contribution to Jacob's operating income for 2018 was a $3.80 million loss before taxes. Jacob has an average tax rate of 30%.

Scenario 1: Assume that Jacob sold the division's assets on December 31, 2018, for $24.80 million. The book value of the division's assets was $19.72 million at that date.