How Should Hobson Report Tax on the Discontinued Operation

question 41

Multiple Choice

How should Hobson report tax on the discontinued operation?

• A)A tax receivable of $12 million in the balance sheet.
• B)A tax benefit of $12 million to net against the $30 million pretax loss.
• C)A deferred tax asset of $12 million in the balance sheet.
• D)None of these answer choices are correct.

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Definitions:

Major Airlines

Refers to the largest and most significant airlines operating in the aviation industry, often recognized by their extensive international and domestic flight operations and substantial fleet size.

Systematic Risk

The risk inherent to the entire market or market segment that cannot be eliminated through diversification.

General Health

A broad term referring to the overall physical and mental condition and well-being of an individual or population.

Unsystematic Risk

The risk of price change due to the unique circumstances of a specific security, as opposed to the overall market.