1.Briefly explain why tax-over-book depreciation and patent amortization are listed as deferred tax liabilities?

2. Estimate the effective tax rate for Black Inc. in 2016. Why is it different from the 35% federal statutory rate?

In its 2016 annual report to shareholders, Bernie Inc. disclosed the following information about income taxes A reconciliation of income taxes computed at the United States federal statutory income tax rate (35%) to the provision (benefit) for income taxes reflected in the Consolidated Statement of Operations for the years ended December 31, 2016, 2015, 2014, is as follows (S in millions) 2016 2015 2014 Provision (benefit) for income taxes at United States federal statutory rate of 35% State and local income taxes, net of federal income tax benefit Taxes on foreign income which differ from the S5.2$(4.9)$(11.3) (3.9) (4.3) United States statutory rate Losses with no tax benefit Benefit of foreign sales corporation. Other (2.5) 2.8 (0.7) 6.2 (0.5) .. . 0.6 0.5 (3.2) S1.9$(7.6)$(10.2) The significant components of the net deferred tax assets at December 31, 2016 and 2015, were as follows (S in millions) 2016 2015 Deferred Tax Assets