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The following information comes from the 2016 annual report of Eugene Corp. On May 2, 2016, Eugene sold its 41% equity interest in Chemult Industries

The following information comes from the 2016 annual report of Eugene Corp.

On May 2, 2016, Eugene sold its 41% equity interest in Chemult Industries Corporation to Chemult for $25 million and settled all of the pending arbitration proceedings, litigation and related disputes with Chemult and its officers and other owners, pursuant to a settlement and redemption agreement. Eugene had acquired the Chemult equity interest in 2007, when Eugene invested approximately $1.3 million in Chemult. The investment in Chemult was accounted for under the equity method and adjusted for earnings or losses as reported in the financial statements of Chemult and dividends received from Chemult. At December 31, 2015, our investment balance for Chemult was $17.2 million, and for the years ended December 31, 2016, 2015 and 2014, our equity in earnings was $5.2 million, $15.1 million and $11.6 million, respectively.

The following table summarizes Chemults financial information as of and for the year ended December 31 (in thousands):

Jan. 1 May 2, 2016

Jan. 1 Dec. 31, 2015

Revenues

$146,597

$375,022

Gross margin

$ 18,118

$ 50,677

Net income

$ 12,712

$ 36,904

December 31,

2015

Current assets

$147,851

Noncurrent assets

3,367

Current liabilities

96,856

Noncurrent liabilities

12,411

Equity

$ 41,951

Required:

If Chemult did not pay any dividends to Eugene during 2016, based on the above information, calculate the gain or loss on the May 2, 2016 sale.

Answer: ______________________

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