Gildan Activewear Inc. is a Canadian company that manufactures and sells activewear, socks, and underwear. Manufacturing is primarily done in Honduras and the Dominican Republic and sales are made worldwide.
Instructions
Through SEDAR (www.sedar.com) or Gildan's website (www.gildan.com), obtain a copy of the company's financial statements for its year ended September 30, 2012, and answer the following questions.
(a) Review the consolidated statements of earnings and comprehensive income for 2012 and 2011.
What was the income tax expense for each year? Did the company apply intraperiod tax allocation in 2012 or 2011? Why or why not? How much does the company show as income taxes payable on the consolidated statements of financial position for the fiscal year ends 2012 and 2011? What was reported regarding cash flows of current income taxes in 2012 and 2011, and where did you find this information?
(b) What was the company's effective tax rate for 2012? For 2011? What was the statutory rate in each of these years? What caused the differences? Be specific about whether the effective rate was increased or decreased as a result of each cause that you identify. Note 20 will aid you.
(c) For each deferred tax account reported on the September 30, 2012 consolidated statement of financial position, explain what underlies the balance that is reported. For each temporary difference, identify the SFP asset or liability where the tax basis and book value differ.
(d) What are the losses that the company has available to carry forward? When do these losses expire? How has the company accounted for these losses? Note 20 will aid you.