Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Analyzing and Interpreting Tax Footnote (Financial Statement Effects Template) Snapchat Inc. reports total tax expense of $2,547 thousands on its income statement for year ended

Analyzing and Interpreting Tax Footnote (Financial Statement Effects Template) Snapchat Inc. reports total tax expense of $2,547 thousands on its income statement for year ended December 31, 2018, and paid cash of $3,958 thousand for taxes and decreased taxes payable by $755 thousand. The tax footnote in the company's 10-K filing reports the following deferred tax assets and liabilities information.

The domestic and foreign components of pre-tax loss were as follows:

Year Ended December 31 ($ thousands) 2017 2018
Domestic $(969,922) $(3,027,580)
Foreign (283,442) (435,828)

Loss before income taxes

$(1,253,364) $(3,463,408)

The significant components of net deferred tax balances were as follows:

December 31 ($ thousands) 2017 2018
Deferred tax assets

Accrued expenses

$10,534 $21,056

Deferred revenue

2,142 976

Intangible assets

140,771 140,494

Stock-based compensation

396,604 254,255

Net operating losses

473,110 849,224

Tax credit carryforwards

124,078 235,300

Property and equipment

-- 203

Other

2,015 322

Total deferred tax assets

$1,149,254 $1,501,830
Deferred tax liability

Property and equipment

(5,883) --

Total deferred tax liabilities

(5,883) --
Total net deferred tax assets before valuation allowance 1,143,371 1,501,830
Valuation allowance (1,144,543) (1,502,346)
Net deferred taxes $(1,172) $(516)

Snapchat's gross deferred tax assets increased in 2018. By what amount did Snapchat's gross deferred tax assets increase? $Answer

(thousands).

Explain how the valuation allowance affected 2018 net income.

Snapchat's valuation allowance account increased during the year, which means net income increased.

Snapchat's valuation allowance account decreased during the year, which means net income increased.

Snapchat's valuation allowance account increased during the year, which means net income decreased.

Snapchat's valuation allowance account decreased during the year, which means net income decreased.

Use the financial statement effects template to record income tax expense for fiscal year 2018 along with the changes in both deferred tax assets and liabilities and the valuation allowance. Use negative signs with answers, when appropriate.

Balance Sheet

Transaction Cash Asset +

Noncash

Assets

= Liabilities +

Contributed

Capital

+

Earned

Capital

Record tax expense & changes in accounts Answer

Answer

Answer

Answer

Answer

Income Statement

Revenue - Expenses =

Net

Income

Answer

Answer

Answer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Audit And Assurance Q And A 2019

Authors: ACA Simplified

1st Edition

1792949863, 978-1792949869

More Books

Students also viewed these Accounting questions

Question

b. Explain how you initially felt about the communication.

Answered: 1 week ago

Question

3. Identify the methods used within each of the three approaches.

Answered: 1 week ago

Question

a. When did your ancestors come to the United States?

Answered: 1 week ago