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The following tables were excerpted from Pepsico's 2015 Form 10-K. All amounts are in millions of dollars and the deferred tax asset and liability amounts
The following tables were excerpted from Pepsico's 2015 Form 10-K. All amounts are in millions of dollars and the deferred tax asset and liability amounts are as of December31 of the respective year 2015 2014 2013 Provision for income tares Current: U.S. Federal Foreign State Deferred: U.S. Federal Foreign State $ 1,143 773 65 1,981 (14) (32) 6 (40) $ 1,941 $ 1,364 851 210 2,425 (33) (60) (133) (226) $ 2,199 $1,092 807 124 2,023 87 11 (17) 81 $2,104 S 2.023 3.920 1.141 7,084 $ 2,174 4,068 1,106 7,348 Deferred tax liabilities Property, plant and equipment Intangible assets other than nondeductible goodwill Other Gross deferred tax liabilities Deferred tax assets Net carry forwards Stock-based compensation Retiree medical benefits Other employee-related benefits Pension benefits Other Gross de ferred tax assets Valuation allowances Deferred tax assets, net Net deferred tax liabilities 1.279 240 343 547 424 1,119 3.952 (1.136) 2,816 $ 4.268 1.329 265 388 646 263 1.258 4.149 (1.230) 2.919 $ 4,429 Required: 1. Provide journal entries to record the income tax expense for 2013 through 2015. You may indicate the sum of the changes in the various deferred tax assets/liabilities by a single debit or credit to the Net deferred tax asset/liability account. 2. Refer to the deferred tax asset and liability items reported by Pepsico at December 31, 2015 and 2014. For each item (except Other), determine whether the balance changed because of a net originating or net reversing temporary difference. Provide a likely explanation for each of the temporary differences and clearly discuss whether it indicates a higher or lower financial reporting revenue or expense relative to the amount reported in the 2015 tax return. 3. Pepsico's reported deferred tax expense in 2015 (minus $40 million) does not equal the reported decrease in net deferred tax liability ($4,429 - $4,268 = $161 million) over the course of 2015. What is the likely source of this discrepancy
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