The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: Pretax accounting income included: $200 Overweight fines (not deductible for tax purposes) 5 Depreciation expense Depreciation in the tax return using MACRS: 70 110 The applicable tax rate is 40%. There are no other temporary or permanent differences. Which of the following must Franklin Freightways disclose related to the income tax expense reported in the income statement ($ in millions)? A) Only the current portion of the tax expense of $66. B) Only the total tax expense of $82. C) Both the current portion of the tax expense of $66 and the deferred portion of the tax expense of $16. D) None of these answer choices are correct.
The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: Pretax accounting income included: $200 Overweight fines (not deductible for tax purposes) 5 Depreciation expense Depreciation in the tax return using MACRS: 70 110 The applicable tax rate is 40%. There are no other temporary or permanent differences. Which of the following must Franklin Freightways disclose related to the income tax expense reported in the income statement ($ in millions)? A) Only the current portion of the tax expense of $66. B) Only the total tax expense of $82. C) Both the current portion of the tax expense of $66 and the deferred portion of the tax expense of $16. D) None of these answer choices are correct.
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 11DQ
Related questions
Question
Explain in short details and give proper answer for this[Account] questions.
Transcribed Image Text:The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars):
Pretax accounting income:
Pretax accounting income included:
$200
Overweight fines (not deductible for tax purposes) 5
Depreciation expense
Depreciation in the tax return using MACRS:
70
110
The applicable tax rate is 40%. There are no other temporary or permanent differences. Which of the following must Franklin Freightways
disclose related to the income tax expense reported in the income statement ($ in millions)?
A) Only the current portion of the tax expense of $66.
B) Only the total tax expense of $82.
C) Both the current portion of the tax expense of $66 and the deferred portion of the tax expense of $16.
D) None of these answer choices are correct.
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