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The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax accounting income: $ 507 Pretax accounting

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

Pretax accounting income:

$

507

Pretax accounting income included:

Overweight fines (not deductible for tax purposes)

5

Depreciation expense

100

Depreciation in the tax return

260

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

Which of the following must Franklin Freightways disclose related to the income tax expense reported in the income statement ($ in millions)?

Multiple Choice

Both the current portion of the tax expense of $88 and the deferred portion of the tax expense of $40.

Only the total tax expense of $200.

None of these answer choices are correct.

Only the current portion of tax expense of $160

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