Answer:
Option (C) is correct.
Explanation:
Deferred Tax Asset balance at 2016 end = $130,000,000
Realizable Deferred Tax Asset @70 % of balance:
= 0.7 × $130,000,000
= $91,000,000
Deferred Tax Asset balance at the end of 2015 = $98,000,000
Reduction in Deferred Tax Asset in 2016:
= Deferred Tax Asset balance at the end of 2015 - Realizable Deferred Tax Asset
= $98,000,000 - $91,000,000
= $7,000,000
Total Income Tax expense in 2016:
= Reduction in Deferred Tax Asset in 2016 + Income Tax payable in 2016
= $7,000,000 + $84,000,000
= $91,000,000
So, answer is $91 million.
