Solved by verified expert:Objective – Question attached, please submit both word and excel file (if excel file is required)INCOME TAXESDescribe the differences between accounting profit and taxable incomeExplain how deferred tax liabilities and asset are createdExplain how these liabilities and assets should be treated for financial analysis purposes.Calculate income tax expense, income taxes payable, deferred tax assets and deferred tax liabilities.Evaluate the impact of a tax rate change on a company’s financial statements and ratiosDistinguish between temporary and permanent differences in accounting income and taxable incomeExplain recognition and measurement of current and deferred tax itemsAnalyze the disclosures related to deferred tax items and how the information in those disclosures affect the financial statements and ratios of the companyLONG-TERM LIABILITIESDetermine the initial recognition and measurement of bondsCalculate the interest expense, amortization of bond discount/premium and interest payments using the effective interest methodDescribe how debt covenants protect creditorsDescribe the financial statement presentation and disclosures related to debtExplain why a company might choose to lease an asset instead of purchasing itDistinguish between a capital lease and an operating lease from both the lessor’s and lessee’s perspectivesCompare and contrast the disclosures related to capital and operating leasesCompare the presentation and disclosure of defined contribution and defined benefit pension plansCalculate and interpret leverage and coverage ratios
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Download the 2016 financial statements for Deere & Company
1. Over what time period are Deere’s tax credit carryforwards expiring? Do you think Deere will be
able to utilize them in the future?
2. How would Deere’s deferred tax assets and deferred tax liabilities be affected if the federal
statutory tax rate was changed to 38 percent? Would a change in rate be beneficial or
detrimental to Deere?
3. How would reported earnings have been affected if Deere were not using a valuation
allowance?
4. How would Deere’s net operating loss carryforwards affect the valuation that an acquiring
company would be willing to offer?
5. Would you consider the deferred tax liability as debt or as equity? Should you exclude the
deferred tax liability from both debt and equity when calculating the debt-to-equity ratio?
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