EyeBeam Corporation reports the following pretax accounting (and taxable) income items during 2016:

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

*Of this amount, revenues are $320,000 and expenses are $230,000.

Required:

1.	Prepare the journal entry necessary to record the 2016 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 2016 income statement.

CHART OF ACCOUNTS

EyeBeam Corporation

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue
882	Gain on Disposal of Discontinued Division

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
892	Loss from Operations of Discontinued Division
910	Income Tax Expense

Prepare the journal entry necessary to record the 2016 intraperiod income tax allocation in regard to the 2016 information on December 31. 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.

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
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2
3
4

Labels
Results from discontinued operations
Amount Descriptions
Expenses
Income from continuing operations
Net income
Pretax income from continuing operations
Revenues

Prepare EyeBeams 2016 income statement. Additional Instructions

EYEBEAM CORPORATION

Income Statement

For Year Ended December 31, 2016

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