Edited excerpts from Google Inc.€™s 2012 tax note follow:

Required:
1. Prepare the book journal entry for income tax expense for 2012 (combine U.S., foreign, and state income taxes). Clearly indicate both the account title and whether the account is being debited or credited.
2. Using information given in the tax rate reconciliation, estimate Google's pre-tax book
income for 2012. Show your work.
3. What was Google's 2012 effective tax rate? Show your work.
4. Estimate Google's taxable income. (Note: You do not have enough information to do this by category; therefore, combine U.S., foreign, and state taxes.) Show and clearly label all work.
5. Using information found in the tax note, determine whether depreciation and amortization expense was higher for book or tax purposes in 2012 and by how much.
6. Based on information in the tax note, are the tax rates in foreign countries in which Google operates greater than or less than the U.S. taxrate?

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201I Expected provision at federal statutory rate (35%) State taxes, net of federal benefit Stock-based compensation expense Change in valuation allowance Foreign rate differential Non-deductible legal settlement Basis difference in investment in Home business Other permanent differences 1 4