In 2005 WCCO reported depreciation expense on the statement of cash flows of $426 million. the deferred tax liability related to depreciation increased from $361 million to $452 million in 2005. Assuming a statutory tax rate of 35%, compute the tax basis depreciation from 2005 and the cumulative financial reporting tax difference for net property, plant and equipment as of fiscal year 2005.
At the statutory tax rate of 35%, the tax basis depreciation must have been 426+(452-361)/.35=426+260=686 Cummulative financial reporting tax difference must be the 452/.35=1291.43, or my english is very bad.
nice map
getterdone Wrote: ------------------------------------------------------- > In 2005 WCCO reported depreciation expense on the > statement of cash flows of $426 million. the > deferred tax liability related to depreciation > increased from $361 million to $452 million in > 2005. Assuming a statutory tax rate of 35%, > compute the tax basis depreciation from 2005 and > the cumulative financial reporting tax difference > for net property, plant and equipment as of fiscal > year 2005. no need to confuse yourself, remember DTL = difference between TAX reporting and Gaap reporting * .35 452 = X *.35 X = 1291.42