Reference no: EM133157760

Question - Information for Hobson Corp. for the current year ($- in millions):

Income from continuing operations before tax $155

Loss on discontinued operation (pre-tax) Temporary differences (all related to operating income):

Accrued warranty expense in excess of expense included in operating income 10

Depreciation deducted on tax return in excess of depreciation expense 25

Permanent differences (all related to operating income):

Non-deductible portion of entertainment expense 5

The applicable enacted tax rate for all periods is 25%.

Required - How should Hobson report tax on the discontinued operation?