In its 2008 annual report, Nike, Inc., the athletic sportswear company, provided the following data about its
Question:
In its 2008 annual report, Nike, Inc., the athletic sportswear company, provided the following data about its current and deferred income tax provisions (in millions):
2008
Current income taxes due ................... $ 920.1
Deferred income taxes ......................... (300.6)
Total provision for income taxes ....... $ 619.5
1. What were the 2008 income taxes on the income statement? Record in journal form the overall income tax liability for 2008, using income tax allocation procedures.
2. Nike’s balance sheet contains both deferred income tax assets and deferred tax liabilities. How do such deferred income tax assets arise? How do such deferred income tax liability arise? Given the definition of liabilities, do you see a potential problem with the company’s classifying deferred income taxes as a liability? Why or why not?
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
1 The income taxes on the income statement equals the total provision for inco...View the full answer
