Southeast Airlines had pretax earnings of $65 million. Included in this amount is income from discontinued operations of $10 million. The company's tax rate is 25%. What is the amount of income tax expense that Southeast would report in its income statement for continuing operations? (Enter your answer in millions rounded to 2 decimal place (i. e., i. e., 5,500,000 should be entered as 5.50). Amount to be deducted should be indicated with a minus sign.)

Question

Rosemary Young

Business

8 July, 05:49

Southeast Airlines had pretax earnings of $65 million. Included in this amount is income from discontinued operations of $10 million. The company's tax rate is 25%. What is the amount of income tax expense that Southeast would report in its income statement for continuing operations? (Enter your answer in millions rounded to 2 decimal place (i. e., i. e., 5,500,000 should be entered as 5.50). Amount to be deducted should be indicated with a minus sign.)

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Deleon · Answer 1

The amount of income tax expense that Southeast would report in its income statement for continuing operations is $ 18,750,000.

Explanation:

According to the details we the company had a Pretax earnings of $ 65 million and include there is an income of discontinued operation of $ 10 million, hence Total taxable income = $ 65 million + $ 10 million = $ 75 million.

The Income tax rate is 25%

Hence, the Income tax expense is Total taxable income * the Income tax rate

Income tax expense = $ 75 million * 25%

Income tax expense = $ 18,750,000