Analyzing and Interpreting Tax Footnote Under Armour, Inc. reports total tax expense on its income statement for year ended December 31, 2010 of $40,442 and cash paid for taxes of $38,773. The tax footnote in the company's 10-K filing, reports the following deferred tax information. Deferred tax assets and liabilities consisted of the following (in thousands):

December 31 ($ thousands)	2010	2009
Deferred tax assets
State tax credits, net of federal tax impact	$ 1,750	$ --
Tax basis inventory adjustment	3,052	1,874
Inventory obsolescence reserves	2,264	2,800
Allowance for doubtful accounts and other reserves	8,996	7,042
Foreign net operating loss carryforward	10,917	9,476
Stock-based compensation	8,790	5,450
Intangible asset	372	1,068
Deferred rent	2,975	1,728
Deferred compensation	1,449	1,105
Other	2,709	3,151
Total deferred tax assets	43,274	33,694
Less: valuation allowance	(1,765)	--
Total net deferred tax assets	41,509	33,694
Deferred tax liabilities
Prepaid expenses	(1,865)	(1,133)
Property, plant and equipment	(3,104)	(5,783)
Total deferred tax liabilities	(4,969)	(6,916)
Total deferred tax assets, net	$ 36,540	$ 26,778

(a) Did Under Armour's deferred tax assets increase or decrease during the most recent fiscal year? Under Armour's deferred tax assets Answerdecreasedincreased

by $Answer

(thousands).

(b) Did Under Armour's deferred tax liabilities increase or decrease during the most recent fiscal year? Under Armour's deferred tax liabilities Answerdecreasedincreased

by $Answer

(thousands).

What proportion of the foreign net operating losses does the company believe will likely expire unused? (Round your answer to the nearest whole number) Answer

%

e) Use the financial statement effects template to record Under Armour's income tax expense for the current fiscal year along with the changes in both deferred tax assets and liabilities. Assume that income taxes payable increased by $11,431 thousand.

Use negative signs with your answers, when appropriate.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
Record tax expense, part cash and part deferred	Answer		Answer		Answer		Answer		Answer

Income Statement
Revenue	-	Expenses	=	Net Income
Answer		Answer		Answer