Question

For the current year ($ in millions), Funky Freightways had $92 in pretax accounting income. This included warranty expense of $7 and $20 in depreciation expense. 6 million of warranty costs were incurred, and MACRS depreciation amounted to $43. In the absence of other temporary or permanent differences, what was Funky's income tax payable currently, assuming a tax rate of 40%a) 18.6 Million
b) 24.0 Million
c) 27.2 Million
d) 32.8 Million

Answer 1

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