Income tax allocation is an integral part of generally accepted accounting principles. Income tax allocation consists of both intraperiod and interperiod tax allocation.

Required

1. Explain the difference between interperiod and intraperiod income tax allocation.

2. Explain how a corporation discloses its income tax expense (or credit) for the year under intraperiod allocation.

3. Provide an example of intraperiod tax allocation on a corporation’s income statement that includes income from continuing operations, a loss from the sale of a discontinued component, a gain from the operations of the discontinued component, and an extraordinary gain.

Assume a 30% tax rate.