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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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Answer:

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

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