In 2021, Heartfin Farms reported a pretax accounting loss of $196 million.

During the year, the company paid a fee of $4 million due to a fine from the Food and Drug Administration.

The company accrued an expense for estimated paid future absences of $30 million relating to the companys employee vacation program. The amounts owed will be paid equally over the next two years ($15 million in 2022 and $15 million in 2023).

The enacted tax rate is 25%.

There were no temporary differences at the beginning of the year and none originating in 2021 other than those described above.

In the prior two years, Hinton Farms reported taxable income of $64 million in 2020 and $88 million in 2019.

What is the amount that Heartfin Farms should record as its receivable-refund for 2021?

A.
$18 million

B.
$10 million

C.
$48 million

D.
$38 million

Question

In 2021, Heartfin Farms reported a pretax accounting loss of $196 million.
During the year, the company paid a fee of $4 million due to a fine from the Food and Drug Administration.
The company accrued an expense for estimated paid future absences of $30 million relating to the companys employee vacation program. The amounts owed will be paid equally over the next two years ($15 million in 2022 and $15 million in 2023).
The enacted tax rate is 25%.
There were no temporary differences at the beginning of the year and none originating in 2021 other than those described above.
In the prior two years, Hinton Farms reported taxable income of $64 million in 2020 and $88 million in 2019.

What is the amount that Heartfin Farms should record as its receivable-refund for 2021?

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