A$)$ Assuming that Walmart had no significant permanent differences between book income and taxable income, did income before taxes for financial reporting exceed or fall short of taxable income for the year ending January $31,2016($hereafter$,$ fiscal $2015)?$ Explain.

B$)$ Assuming all current taxes are paid in cash, will the adjustment to net income for deferred taxes to compute cash flow from operations in the statement of cash flows result in an addition or subtraction for fiscal $2015?$

C$)$ Walmart reports deferred revenue for sales of gift certificates and for Sam$$s Club membership fees. These amounts are taxed when collected, but not recognized in financial reporting income until tendered at a store. Why does the tax effect of deferred revenue appear as a deferred tax asset?

D$)$ Walmart recognizes a valuation allowance on its deferred tax assets to reflect net operating losses of consolidated foreign subsidiaries. The valuation allowance decreased over the last year. What effect does this have on net income in the most recent year $($fiscal $2015)?$

E$)$ Walmart uses the straight$-$line depreciation method for financial reporting and accelerated depreciation for income tax reporting. Like most firms, the largest deferred tax liability is for property, plant, and equipment $($depreciation$).$ Explain how depreciation leads to a deferred tax liability. Suggest possible reasons why the amount of the deferred tax liability related to depreciation decreased over the last year.

F$)$ Discussion of management's ability to manage earnings in the long term given the operational manipulations discussed in the case.$$