Question

The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: $ 310 Pretax accounting income included: Overweight fines (not deductible for tax purposes) 12 Depreciation expense 77 Depreciation in the tax return using MACRS: 122 The applicable tax rate is 25%. There are no other temporary or permanent differences. Franklin's taxable income ($ in millions) is:

Answer 1

Answer:

$277

Explanation:

Particular                                             Amount

Pre-Tax Accounting Income                 $310

Adjustments

Add: Overweight Fines                         $12

Add: Depreciation Expenses                $77

Less: Depreciation as per tax return    $122

Taxable Income                                     $277

Therefore, Franklin's taxable income is $277.