1.The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars):

Pretax accounting income:	$	300
Pretax accounting income included:
Overweight fines (not deductible for tax purposes)		6
Depreciation expense		64
Depreciation in the tax return using MACRS:		112

The applicable tax rate is 25%. There are no other temporary or permanent differences. Franklin's taxable income ($ in millions) is:

a.112

b.48

c.252

d.258

2.Gear Corporation had the following common stock record during the current calendar year:

Outstanding-January 1	105,000
Additional shares issued 3/31	5,050,000
Distributed a 10% stock dividend on 6/30
Shares reacquired 9/30	105,000

What is the number of shares to be used in computing basic EPS?

a.5,555,000

b.5,155,000

c.4,255,500

d.5,102,500