Question

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.

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

Dear Student,

Best effort has been made to give quality and correct answer. But if you find any issues please comment your concern. I will definitely resolve your query.

Also please give your positive rating.