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

Income from continuing operations before tax	$	230
Loss on discontinued operation (pretax)		50
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		15
Permanent differences (all related to operating income):
Nondeductible portion of entertainment expense		5

The applicable enacted tax rate for all periods is 40%. How should Hobson report tax on the discontinued operation?

Multiple Choice

• A deferred tax asset of $20 million in the balance sheet.

• A tax receivable of $20 million in the balance sheet.

• A tax benefit of $20 million to net against the $50 million pretax loss.

• None of these answer choices are correct.