Business & Finance

Alamo Inc. had $300 million in taxable income for the current year. Alamo also had a decrease in deferred tax assets of $30 million and an increase in deferred tax liabilities of $60 million. The company is subject to a tax rate of 40%. The total income tax expense for the year was:

A. $390 million.
B. $210 million.
C. $150 million.
D. $180 million.

20. During the current year, Stern Company had pretax accounting income of $45 million. Stern’s only temporary difference for the year was rent received for the following year in the amount of $15 million. Stern’s taxable income for the year would be:

A. $30 million.
B. $60 million.
C. $50 million.
D. $45 million.

Solution:

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