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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: $280 Pretax accounting income included: Overweight fines
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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: $280

Pretax accounting income included: Overweight fines (not deductible for tax purposes) 10 Depreciation expense 69 Depreciation in the tax return using MACRS: 102
The applicable tax rate is 33%. There are no other temporary or permanent differences. Franklin's taxable income ($ in millions) is:________.
a. $102.
b. $33.
c. $247.
d. $257.

User CalvinChe
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1 Answer

8 votes
8 votes

Answer:

d. $257

Step-by-step explanation:

Calculation to determine what Franklin's taxable income ($ in millions) is:

Accounting income$280

Add Permanent difference: Fines $10

Less Temporary difference: Depreciation ($33)

($102-$69)

Taxable income $257

Therefore Franklin's taxable income ($ in millions) is:$257

User Pavan Gupta
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