Below is information from Amazon\'s 2012 income tax footnote RECONCILIATION OF A

Question

Below is information from Amazon's 2012 income tax footnote RECONCILIATION OF AMAZON'S STATUTORY AND EFFECTIVE TAX RATES YEAR ENDED DECEMBER 31 2010 2011 2012 35. 0% 0.2 31.5 (4.4) 35.0% Federal statutory tax rate State taxes, net of federal impact Impact of foreign tax differential Tax credits Nondeductible stock-based compensation Other Effective income tax rate 35.0% (8.4) (3.2) (12.7) 1.6 (0.8 5.2 22 21.8% 27.4% 27.9% ? - Amazon reported tax expense on its 2012 income statement of $428 million What did Amazon report as income before income taxes on its 2012 income statement? (Enter your answer in millions rounded to nearest whole number.) Income before income taxes million

Explanation / Answer

Answer:

[The sum of effective tax rates for 2012 is incorrect as given in table-image file. The correct sum is (35 + 0.2 +31.5-4.4+11.1+5.2 =) 78.6%]

Hence income before taxes = Income tax expense / Effective Income tax = $428 / 78.6% = $545 million.

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