E18-18

Calculating Intraperiod Income Taxes

LO 18.6 EyeBeam Corporation reports the following pretax accounting (and taxable) income items during 2019:

Income from continuing operations	$ 90,000
Loss from operations of a discontinued division	(10,000)
Gain from the disposal of the discontinued division	25,000

Required:

1. Prepare the journal entry necessary to record the 2019 intraperiod income tax allocation in regard to the preceding information. Assume a tax rate of 15% on the first $40,000 of income and a rate of 30% on income in excess of $40,000.

2. Prepare EyeBeams 2019 income statement.