Giada Foods reported S1.000 million in income before income taxes for 2016, its

Question

Giada Foods reported S1.000 million in income before income taxes for 2016, its first year of operations. Tax depreciation exceeded depreciation for financial reporting purposes by $130 million. The company also had non-tax-deductible expenses of $104 million relating to permanent differences. The income tax rate for 2016 was 35%, but the enacted rate for years after 2016 is 40%. The balance in the deferred tax liability in the December 31, 2016. balance sheet is: $21 million. $46 million. $52 million. $73 million.

Explanation / Answer

Income before Income Taxes 1000 Tax Depreciation exceeded $ 130 Million DTL 130*40% 52 The correct answer is C. $ 52 Million

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