The following condensed income statements of the Jackson Holding Company are presented for the two years ended December 31, 2021 and 2020: Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Gain on sale of division 2021 2020 $ 15,300,000 $9,900,000 9,350,000 6,150,000 5,950,000 3,750,000 3,320,000 2,720,000 2,630,000 1,030,000 630,000 3,260,000 1,030,000 815,000 257,500 $ 2,445,000 $ 772,500 Income tax expense Net income On October 15, 2021, 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, 2021, for $5,090,000. Book value of the division's assets was $4,460,000. The division's contribution to Jackson's operating income before-tax for each year was as follows: 2021 2020 $415,000 $315,000 Assume an income tax rate of 25%.