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Information for Hobson Corp. for the current year ($ in millions): Income from continuing operations before...

Information for Hobson Corp. for the current year ($ in millions): Income from continuing operations before tax $ 250 Loss on discontinued operation (pretax) 50 Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income 10 Depreciation deducted on tax return in excess of depreciation expense 15 Permanent differences (all related to operating income): Nondeductible portion of entertainment expense 10 The applicable enacted tax rate for all periods is 40%. How much tax expense on income from continuing operations would be reported in Hobson's income statement? Multiple Choice $90 million. $104 million. $102 million. $100 million.

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Answer #1

The answer is 102 Million.

Particulars Amounts
Income from continuing operations before tax      250.00
Accrued warranty expense         10.00
Excess of depreciation expense      (15.00)
Entertainment expense         10.00
Taxable Income      255.00
Income Tax(40%)      102.00


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