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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 December 31 of the respective year. Table Summary: Rows 5, 9 and 10 are totals rows and contain no data in column 1. Except for the header in row 1, all rows in column 4 are blank. 2015 2014 2013 Provision for income taxes Current: U.S. Federal $ 1,143 $1,364 $1,09 Foreign 773 851 80 State 65 210 12 1,981 2,425 2.02 Deferred: U.S. Federal (14) (33) 8 Foreign (32) (60) State 6 (133) (1 (40) (226) $1,941 $2,199 $2,10 Deferred tax liabilities Property, plant and equipment $2,023 $ 2.174 Intangible assets other than nondeductible goodwill 3,920 4,068 Other 1,141 1.106 Gross deferred tax liabilities 7,084 7,348 Deferred tax assets Net carryforwards 1,279 1,329 Stock-based compensation 240 265 Retiree medical benefits 343 388 Other employee-related benefits 547 646 Pension benefits 424 263 Other 1,119 1,258 Gross deferred tax assets 3,952 4,149 Valuation allowances (1,136) (1,230) Deferred tax assets, net 2,816 2,919 Net deferred tax liabilities $4,268 $4,429 Source: Pepsico's 2015 Form 10-K 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 Page 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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