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guajiro [1.7K]
3 years ago
8

Alamo Inc. had $300 million in taxable income for the current year. Alamo also had a decrease in deferred tax assets of $30 mill

ion and an increase in deferred tax liabilities of $60 million. The company is subject to a tax rate of 40%. The total income tax expense for the year was:
Business
1 answer:
scoray [572]3 years ago
7 0

Answer:

$ 210 million

Explanation:

Data provided :

Taxable income for the current year = $ 300 million

Tax rate of the income  = 40%

therefore, the income tax for the current year = 0.40 × $ 300 million

or

the income tax for the current year = $ 120 million

Decrease in the deferred tax assets = $ 30 million

Increase in the deferred tax liabilities = $ 60 million

Hence,

the total income tax expense for the year

= $ 120 million + $ 30 million + $ 60 million

or

= $ 210 million

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