Question

The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: $ 160 Pretax accounting income included: Overweight fines (not deductible for tax purposes) 8 Depreciation expense 80 Depreciation in the tax return using MACRS: 119 The applicable tax rate is 25%. There are no other temporary or permanent differences. Franklin's taxable income ($ in millions) is: Multiple Choice $39. $129. $121. $119.

Answer 1

$129

Step-by-step explanation:

Pretax accounting income: $ 160

Overweight fines (not deductible for tax purposes) 8

Depreciation expense 80

Depreciation in the tax return using MACRS: 119

Franklin's taxable income ($ in millions) = $160 + $8 - ($119 - $80) =