The following condensed income statements of the Jackson Holding Company are pre

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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 2817 Sales Cost of goods sold Gross profit Operating expenses Operating income Gain on sale of division $15,300,000 $9,980,000 9,350,000 6,150,000 5,950,000 3,750,800 3,320,000 2,720,8 2,630,000 1,030,800 630,008 3,260,000 1,030,000 Income tax expense Net income 652,008 286,008 $ 2,688, 008 $ 824,08 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 $5,090,000. 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: 2018 $415,800 2017 $315,800 Assume an income tax rate of 20%. Required: (In each case, net any gain or loss on sale of division with annual income or loss from the division and show the tax effect on a separate line) 1. Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before Income taxes. lgnore EPS disclosures. 2. Assume that by December 31, 2018, the division had not yet been sold but was considered held for sale. The fair value of the division's assets on December 31 was $5,090,000. Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before income taxes. Ignore EPS disclosures. 3. Assume that by December 31, 2018, the division had not yet been sold but was considered held for sale. The fair value of the division's assets on December 31 was $3,930,000. Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before income taxes. Ignore EPS disclosures. Complete this question by entering your answers in the tabs below

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Jackson Holding Company Comparative Income Statements For the years ended Dcember 31 2018 2017 Operating Income 2630000 1030000 Add: Loss from discontinued operations 415000 315000 Income from continuing operations before Income Taxes 3045000 1345000 Income Taax Expense 40% of total above -1218000 -538000 Income from Continuing operations 1827000 807000 Discontinued operations Gain/Loss: Income/Loss from operations of discontinued component -415000 -315000 Gain on sale of division 630000 Income/ Loss on Discontinued operations 215000 -315000 income Tax Benefit 40% of Income/loss from discountinued operations -86000 126000 Net loss from discontinued operation after tax 129000 -189000 Net Income 1956000 618000

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