Question

Micro Corp. reported a statutory tax rate of 35% and an effective tax rate of approximately 15%. The current year's income statement reported income tax expense of $2,953 million. What did Micro report as income before income tax expense that year

Answer 1

Answer:

$19,687 million

Explanation:

Income tax expense = Income before income tax expense*Effective tax rate

Income before income tax expense = Income tax expense / Effective tax rate

Income before income tax expense = $2,953 million / 15%

Income before income tax expense = $2,953 million / 0.15

Income before income tax expense = $19,687 million

So, the amount that Micro report as income before income tax expense that year is $19,687 million.