Kroger Co. is one of the largest retail food companies in the United States as measured by total annual sales. The Kroger Co. operates supermarkets, convenience stores, and manufactures and processes food that its supermarkets sell. Kroger's stores operate under names such as Dillon Food Stores, City Market, Sav-Mor, Kwik Shop, and Ralph's.
Like most corporations, Kroger has significant deferred tax assets and liabilities. Using Edgar (www.sec.gov) or the company's website check the company's annual report for the year ended February 1, 2009.
1. From the income statement, determine the income tax expense for the most recent year. What is the current portion and the deferred portion of the expense? (See the “Taxes Based on Income” note in the Notes to Consolidated Financial Statements.) Why is the income tax expense from the income statement different from the “provision for income taxes in the disclosure note”?
2. How are the deferred taxes classified in Kroger's balance sheet? (See the “Taxes Based on Income” note in the Notes to Consolidated Financial Statements.) What amounts are reported among current assets or liabilities and among noncurrent assets or liabilities? Why?