Discontinued Operations and Intraperiod Income Tax Allocation

Nephi Corporation reported the following income items before tax for the year $20$X$1$:

Income from continuing operations before income taxes................................................$$260,000$

Income from operations of a discontinued business component........................................$\mathrm{.}70,000$

Loss from disposal of a business component.......................................................................$\mathrm{.}40,000$

The income tax rate is $35\%$ on all items. Prepare the portion of the income statement beginning with income

from continuing operations before income taxes for the year ended December $31,20$X$1$ using the following

methods:

a$)$ Traditional Method of Reporting Discontinued Operations

b$)$ New Method of Reporting Discontinued Operations.