Freda's Florist reported the following before-tax income statement items for the year ended December 31, 2009: All income statement items are subject to a 40% income tax rate. In its 2009 income statement, Freda's separately stated income tax expense and total income tax expense would be:

Question

Quizplus · Accepted Answer

Freda's Florist's income statement items are subject to a 40% income tax rate. This means that 40% of the income before tax will be paid as tax.

Income before tax = $320,000 + $100,000 + $40,000 = $460,000

Income tax expense = 40% x Income before tax = 40% x $460,000 = $184,000

Separately stated income tax expense = 40% x $320,000 = $128,000

Total income tax expense = $184,000

Therefore, the answer is C: $100,000 and $128,000, respectively.

Freda's Florist Reported the Following Before-Tax Income Statement Items for the Year