TB MC Qu. 16-39 (Algo) The following information relates to Franklin...

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

Pretax accounting income:	$	663
Pretax accounting income included:
Overweight fines (not deductible for tax purposes)		5
Depreciation expense		115
Depreciation in the tax return		335

The applicable tax rate is 25%. There are no other temporary or permanent differences.

Franklin's balance sheet at the end of its first year would report:

Multiple Choice

• A deferred tax liability of $55 million among noncurrent liabilities.

• A deferred tax liability of $55 million among current liabilities.

• A deferred tax asset of $55 million among noncurrent assets.

• A deferred tax asset of $55 million among current assets.