The following information was taken from Joe's Cars 2012 financial statements.

PP&E Information

Account	2012	2011
Net Property (from the balance sheet)	25,942	22,371
Depreciation Expense (Automotive and Financial Services)	6,179	5,376
Effective Tax Rate	21.0%

Property and equipment are depreciated primarily using the straight-line method over the estimated useful life of the asset. Useful lives range from 3 years to 36 years. The estimated useful lives generally are 14.5 years for machinery and equipment, 3 years for software (8 years for mainframe and client-based software), 30 years for land improvements, and 36 years for buildings. Special tools generally are amortized over the expected life of a product program using a straight-line method. If the expected production volumes for major product programs associated with the tools decline significantly, we accelerate the amortization reflecting the rate of decline.

You will need to download this file for additional information: The components of deferred tax assets and liabilities are (Note 24):

Assuming the tax rate is 28.8%, Compute the adjustments you would make to the balance sheet and income statement assuming accelerated depreciation is economically correct?
 

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December 31, 2012 December 31, 2011 Deferred tax assets Employee benefit plans 2$ 8,079 $ 8,189 Net operating loss carryforwards 2,417 3,163 Tax credit carryforwards 4,973 4,534 Research expenditures 2,321 2,297 Dealer and customer allowances and claims 1,820 1,731 Other foreign deferred tax assets 1,790 694 Allowance for credit losses 146 194 All other 1,176 1,483 Total gross deferred tax assets 22,722 22,285 Less: valuation allowances (1,923) (1,545) Total net deferred tax assets 20,799 20,740 Deferred tax liabilities Leasing transactions 1,145 932 Deferred income 2,094 2,098 Depreciation and amortization (excluding leasing transactions) 1,561 1,659 Finance receivables 616 551 Other foreign deferred tax liabilities 379 360 All other 289 711 Total deferred tax liabilities 6,084 6,311 Net deferred tax assets/(liabilities) 2$ 14,715 2$ 14,429 December 31, 2012 December 31, 2011 Deferred tax assets Employee benefit plans 2$ 8,079 $ 8,189 Net operating loss carryforwards 2,417 3,163 Tax credit carryforwards 4,973 4,534 Research expenditures 2,321 2,297 Dealer and customer allowances and claims 1,820 1,731 Other foreign deferred tax assets 1,790 694 Allowance for credit losses 146 194 All other 1,176 1,483 Total gross deferred tax assets 22,722 22,285 Less: valuation allowances (1,923) (1,545) Total net deferred tax assets 20,799 20,740 Deferred tax liabilities Leasing transactions 1,145 932 Deferred income 2,094 2,098 Depreciation and amortization (excluding leasing transactions) 1,561 1,659 Finance receivables 616 551 Other foreign deferred tax liabilities 379 360 All other 289 711 Total deferred tax liabilities 6,084 6,311 Net deferred tax assets/(liabilities) 2$ 14,715 2$ 14,429

Answer rating: 100% (QA)

A deferred tax asset is a business tax credit for future taxes and the deferred tax ... View the full answer