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The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: $ 195 Pretax accounting income included: Overweight fines (not deductible for tax purposes) 5 Depreciation expense 70 Depreciation in the tax return 110 The applicable tax rate is 25 %. There are no other temp or perm differences. Franklin Freightways should have recorded ($ in millions) A: Tax payable of $48.75. B:Tax payable of $22.5. C:Tax benefit of $10 due to the NOL. D: Tax payable of $40.

The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: $ 195 Pretax accounting income included: Overweight fines (not deductible for tax purposes) 5 Depreciation expense 70 Depreciation in the tax return 110 The applicable tax rate is 25 %. There are no other temp or perm differences. Franklin Freightways should have recorded ($ in millions) A: Tax payable of $48.75. B:Tax payable of $22.5. C:Tax benefit of $10 due to the NOL. D: Tax payable of $40.

SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 22P
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The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: $ 195 Pretax accounting income included: Overweight fines (not deductible for tax purposes) 5 Depreciation expense 70 Depreciation in the tax return 110 The applicable tax rate is 25 %. There are no other temp or perm differences. Franklin Freightways should have recorded ($ in millions) A: Tax payable of $48.75. B:Tax payable of $22.5. C:Tax benefit of $10 due to the NOL. D: Tax payable of $40.
Transcribed Image Text:The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: $ 195 Pretax accounting income included: Overweight fines (not deductible for tax purposes) 5 Depreciation expense 70 Depreciation in the tax return 110 The applicable tax rate is 25 %. There are no other temp or perm differences. Franklin Freightways should have recorded ($ in millions) A: Tax payable of $48.75. B:Tax payable of $22.5. C:Tax benefit of $10 due to the NOL. D: Tax payable of $40.
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