Use the following to answer questions
The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars):
The applicable tax rate is 40%.There are no other temporary or permanent differences.
-Which of the following must Franklin Freightways disclose related to the income tax expense reported in the income statement ($ in millions)?

Question

Use the following to answer questions 
The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars):
  The applicable tax rate is 40%.There are no other temporary or permanent differences.
-Which of the following must Franklin Freightways disclose related to the income tax expense reported in the income statement ($ in millions)?

Quizplus · Accepted Answer

According to the information provided, the applicable tax rate is 40% and there are no other temporary or permanent differences mentioned. Therefore, the total tax expense would be $82 million ($205 million x 40%). The current portion of the tax expense would be the amount expected to be paid within the current year, which is $66 million ($205 million x 40% - $16 million). Therefore, Franklin Freightways must disclose both the current portion of the tax expense of $66 million and the deferred portion of the tax expense of $16 million.

Use the Following to Answer Questions