Refer to the financial statements of Campbell Soup Company in Appendix A.

Required:

a. Estimate the amount of depreciation expense reported on Campbell’s tax returns for each of the Years 11, 10, and 9. Use a tax rate of 34%.

b. Identify the amounts and sources in each of the Years 11, 10, and 9 for the following (note: combine federal, foreign, and state taxes).

(1) Earnings before income taxes.

(2) Expected income tax at 34%.

(3) Total income tax expense.

(4) Total income tax due.

(5) Total income tax due and not yet paid at end of Years 11, 10, and 9.

c. Why does the effective tax rate for Years 11, 10, and 9 differ from 34% of income before taxes? Answer with a reconciliation including explanations.

d. There is a small tax benefit derived from the divestiture and restructuring charges in Year 10. Can you estimate the cash outlays for these charges in Year 10?