1. Exhibit 18.10 presents the tax reconciliation table for ToyCo, a $5 billion designer and distributor of children’s toys. Convert the tax table from percentages to millions of dollars. Separate the converted tax table into three groups: taxes attributable to domestic income, other operating taxes, and nonoperating taxes. Treat “other, net” as nonoperating.

EXHIBIT 18.10 ToyCo: Tax Reconciliation Table

%

Year 1 Year 2 Year 3 Statutory income tax rate 35.0 35.0 35.0 State and local income taxes, net 1.1 1.0 0.7 Repatriation of foreign earnings – 3.5 –

Liabilities settleable in common stock 3.4 – –

Tax on international earnings (6.5) (7.9) (7.5)

Exam settlements (6.5) (0.8) (0.5)

Other, net 1.5 (0.4) 1.5 Effective tax rate 28.0 30.4 29.2 Profits, $ million Operating profits (EBITA) 587.1 572.6 673.6 Earnings before taxes 462.3 441.1 529.7