Information for Hobson Corporation for the current year ($ in millions): Income from continuing operations before tax Loss on discontinued operation (pretax) Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income Depreciation deducted on tax return in excess of depreciation expense Permanent differences (all related to operating income): Nondeductible portion of entertainment expense The applicable enacted tax rate for all periods is 25%. What should Hobson report as income from continuing operations? $ 160 10 15 35 6

Q: OCF analysis

A: Operating Cashflow Analysis  = Net Income + Depreciation and Amortization- Net Working capital

Q: Define BOM along with an example.

A: There are different types of BOM based on the specific engineering used in the design process or…

Q: Explain CMO Mechanics?

A: Collateralized mortgage obligation: It is a financial instrument that raises funds by…

Q: Explain the characteristics

A:

Q: Describe about the LIFO and FIFO method.

A:

Q: Define value chain.

A: Value Chain: Value Chain is the combination of activities including all the costs to do such…

Q: What is Gordon model?

A: Intrinsic value of a stock is based on the internal information of an organization. That is, market…

Q: Explain Destination principle in relation to VAT.

A: The destination principle is a principle in Value Added Tax (VAT) that determines the taxation of…

Q: What is a NIC?

A: NIC:  NIC stands for network interface card. NIC is an electronic device that provides circuit to…

Q: Describe the functions and powers of ASIC

A: Australian securities and investment commission is a commission made in 1998 of Australian…

Q: Explain compound interest.

A: Compound interest.

Q: Describe WACC and its components.

A: WACC: The weighted average cost of capital (WACC) is a computation of   cost of capitalof a company…

Q: Explain NAREIT Index?

A: NAREIT Index Rate: It implies the compound dividend yield which is communicated as far as a yearly…

Q: What is factoring?

A: Accounts receivable: It can be defined as the amount owed by the customers from the business for the…

Q: Define correlation

A: Correlation: Correlation is a statistical method that can display whether and just how strongly…

Q: Define Factoring.

A: Accounts Receivable: It refers to the amount of money due to the company from the debtors.

Q: What is Miller model?

A: It represents the impact of individual taxes or personal taxes into the valuation of a levered firm,…

Q: Define NRV method.

A: Definition:   Product costs: The costs incurred to acquire the merchandise, ship the stock, prepare…

Q: What is scalability?

A:

Q: Define value drivers

A: Introduction: Value drivers are related to concept of free cash flow valuation model. This helps the…

Q: What is GAAP and how does it work

A: The accounting is based on various principles that are defined by GAAP or IFRS.

Q: What is alpha transfer?

A: The term ‘Alpha’ refers to the active return on investment. In other words, the excess return from…

Q: What is the LIFO conformity rule?

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

Q: Define SML equation

A: Introduction: Security market line is the diagrammatic depiction of capital asset pricing model to…

Q: What is a cfar?

A: Cash Flow at Risk (CFAR):Cash Flow at Risk is a term which focuses on the risk of receivables and…

Q: Describe the features of JIT.

A:

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.