On June 27, year 1, Brite Co. distributed to its common
stockholders 100,000 outstanding common shares of its investment
in Quik, Inc., an unrelated party. The carrying amount on
Brite’s books of Quik’s $1 par common stock was $2 per share.
Immediately after the distribution, the market price of Quik’s
stock was $2.50 per share. In its income statement for the year
ended June 30, year 1, what amount should Brite report as gain
before income taxes on disposal of the stock?