$$Selected information from the December $31,$ Year $3,$ trial balance of Pitt Corp. follows:

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DebitCreditCommon stock$$1,250,000$Additional paid$-$in capital$2,187,500$Retained earnings, January $1,$ Year $41,650,000$Net sales$6,250,000$Cost of sales$$3,750,000$Selling and administrative expenses$1,212,500$Interest expense$122,500$Gain on extinguishment of debt$130,000$Loss on sale of equipment$225,000$Loss due to earthquake damage$700,000$

Pitt uses U$.$S$.$ GAAP.

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Other financial data for the year ended December $31,$ Year $3$:

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$$In September, Year $3,$ one of Pitt's operating plants was destroyed by an earthquake. Earthquakes are rare in the area in which the plant was located. The portion of the resultant loss not covered by insurance was $$700,000.$On October $1,$ Year $3,$ Pitt Corp. committed itself to a formal plan to sell its Kam Division's assets early in Year $4.$ On that date, Pitt estimated that the fair value of the component's assets was $$25,000$ less than the carrying value. Pitt also estimated that Kam would incur operating losses of $$100,000$ for the year$-$ended December $31,$ Year $3$ and $$50,000$ for the period January $1,$ Year $4,$ through February $28,$ Year $4.$ All estimates proved to be materially correct.$$Pitt Corp. bought a truck in January of Year $1$ for $$180,000.$ The truck was expected to have a ten$-$year useful life and no salvage value. During Year $3,$ Pitt Corp. realized that the truck would only have a total useful life of $5$ years. The truck is being depreciated using the straight$-$line method. The depreciation expense $($on the truck$)$ to be included in selling and administrative expenses has not yet been recorded.$$The company has an ongoing policy of retiring long$-$term debt.$$Pitt Corp. had unrealized gains of $$10,000$ on available$-$for$-$sale securities during the current year.$$Pitt Corp's pension plan recorded prior service cost of $$6,000$ during Year $3$ due to plan amendments.$$Pitt$\text{'}$s effective income tax rate is $30\%.$