In fiscal 2016, Microsoft Corp. reported a statutory tax rate of 35% and an effective tax rate of approximately 15%. The 2016 income statement reported income tax expense of $2,953 million.
What did Microsoft report as income before income tax expense that year?

Question

Quizplus · Accepted Answer

The effective tax rate is calculated as income tax expense divided by income before income tax expense. Given the effective tax rate of 15% and income tax expense of $2,953 million, the income before income tax expense can be calculated as $2,953 million / 0.15 = $19,687 million.

In Fiscal 2016, Microsoft Corp