Tuesday 27 June 2017

Using information from the company’s Income Statement and Income Taxes footnote, what was the company’s effective tax rate for 2012? Show how the rate is calculated

Access the 2012 Annual Report for Google and answer the following questions. You can access the annual report at http://www.google.com.
a. Using information from the company’s Income Statement and Income Taxes footnote, what was the company’s effective tax rate for 2012? Show how the rate is calculated.
b. Using information from the Statement of Cash Flows, calculate the company’s cash tax rate.
c. What does the company’s Income Taxes note tell you about where the company earns its international income? Why does earning income in these countries cause the effective tax rate to decrease?
d. What item creates the company’s largest deferred tax asset? Explain why this item creates a deductible temporary difference.
e. What item creates the company’s largest deferred tax liability? Explain why this item creates a taxable temporary difference.
f. How does the company classify its unrecognized tax benefits on the balance sheet?
g. How does the company treat interest and penalties related to its unrecognized tax benefits?

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