Question - On September 1, 2016, 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 2016 was a $2.60 million loss before taxes. Jacob has an average tax rate of 30%.
Assume that Jacob sold the division's assets on December 31, 2016, for $23.60 million. The book value of the division's assets was $18.64 million at that date.
Under these assumptions, what would Jacob report in its 2016 income statement regarding the office equipment division?