Reference no: EM132489250

information for Hobson Corp. for the current year ($ in millions):

Income from continuing operations before tax$255 Loss on discontinued operation (pretax) 20 Temporary differences (all related to operating income):

1. Accrued warranty expense in excess of expense included in operating income 110
2. Depreciation deducted on tax return in excess of depreciation expense 225

Permanent differences (all related to operating income):

1. Nondeductible portion of entertainment expense 25
2. The applicable enacted tax rate for all periods is 25%.

Question 1: What should Hobson report as income from continuing operations?

Multiple Choice

Option 1: $255.00 million.

Option 2: $185.00 million.

Option 3: $416.25 million.

Option 4: $438.75 million.