The following information relates to Interstate Trucking for its first year of operations (data in millions of dollars):
Pretax accounting income: $150
Pretax accounting income included:
Overweight fines (not deductible for tax purposes) 5
Depreciation expense 70
Depreciation on the tax return using MACRS: 110
The applicable tax rate is 40%. There are no other temporary ornontemporary differences.
Interstate's taxable income ($ in millions
Interstate experienced ($ inmillions) a:
1) Tax liability of$46.
2) Tax liability of$16.
3) Tax liability of$50.6.
4) Tax benefit of $10due to the NOL.