Reformulation for Deferred Tax Asset Valuation Allowance Under Armour Inc. reports total tax expense of $154,112 thousand on its income statement for year ended December 31, 2015, and paid cash of $99,708 thousand for taxes. The tax footnote in the companys 10-K filing, reports the following deferred tax assets and liabilities information. December 31 ($ thouands) 2015 2014 Deferred tax assets Stock-based compensation $ 39,851 $ 34,606 Allowance for doubtful accounts and other reserves 33,266 24,219 Accrued expenses 19,999 11,398 Foreign net operating loss carryforward 19,600 16,302 Deferred rent 13,991 11,005 Inventory obsolescence reserves 11,956 8,198 Tax basis inventory adjustment 10,019 5,845 U.S. net operating loss carryforward 9,217 4,733 Foreign tax credits 6,151 5,131 State tax credits, net of foreign impact 4,966 4,245 Deferred compensation 2,080 1,858 Other 6,346 4,592 Total deferred tax assets 177,442 132,132 Less: valuation allowance (24,087) (15,594) Total net deferred tax assets 153,355 116,538 Deferred tax liability Property, plant and equipment (31,069) (17,638) Intangible asset (22,820) (7,010) Prepaid expenses (8,766) (6,424) Other (627) (612) Total deferred tax liabilities (63,282) (31,684) Total deferred tax assets, net $ 90,073 $ 84,854 Use the above information along with the information below to answer the requirements. $ thousands 2012 2013 Deferred tax asset $ 63,898 $ 105,822 Valuation allowance 3,922 8,161 a. Use the four-year average valuation allowance to deferred tax assets (2012 through 2015) to reformulate the income statement for each of the four years 20122015. See Analyst Adjustments 10.3 for guidance in the reformulation process. Compute four year average of valuation allowance/deferred tax assets Round to one decimal place (ex: 0.2345 = 23.5%) Answer 10.8 % Use rounded percentage for subsequent computations. Round answers to the nearest whole number. Use negative signs with answers to indicate adjustments that reduce account balances. Income Statement Adjustments 2012 2013 2014 2015 Income tax expense $Answer $Answer 0 $Answer 0 $Answer 5,749 Net income $Answer 0 $Answer 0 $Answer 0 $Answer 0 b. Reformulate the balance sheet for each of the four years 20122015. Use rounded answers computed in part a. to complete the table below. Use negative signs with answers to indicate adjustments that reduce account balances. Balance Sheet Adjustments 2012 2013 2014 2015 Valuation allowance $Answer (2,908) $Answer 0 $Answer 0 $Answer 0 Deferred tax assets Answer 0 Answer 0 Answer 0 Answer 0 Total assets Answer 0 Answer 0 Answer 0 Answer 0 Retained earnings Answer 0 Answer 0 Answer 0 Answer 0