Tax Provision Workbook

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Concepts covered

FINAL EXAM - Part I
Outline of Topics covered
	Topic	Week Covered
	Perm Ms	1, 2
	Temp Ms	1, 2
	AMT	3
	Tax Credits	3
	Valuation Allowance	3 (lesson 2)
	State Blended Rate	4
	Interim Financial reporting	5
	FIN 48	6, 7
	True-up	9
	FS Disclosures	8, 9
	Foreign - APB 23	11, 12
	Stock Options	13, 14

INDEX

DELTA Corporation & Subsidiary
FINAL EXAM Part 1
INDEX to workpapers
	tab #	Tab Description
	Q	Questions to be answered	Yellow tab - Facts provided
	F	DELTA Corporation Facts
	FA	Delta Fixed Asset Rollforward
	FC	Foxtrot Corporation Facts
	I	2009 Interim Schedule
	C	Delta Current Provision
	P	Delta 2011 Provision-to-Return schedule
	D	Delta Deferred Rollforward schedule
	TA	Tax Account Rollforward schedule
	R	Rate Reconciliation
	FS	2012 Consolidated Income Tax Footnote disclosure

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Q - Questions to be answered

DELTA Corporation & Subsidiary
FINAL EXAM Part 1
Tasks
	Considering the facts outlined on tab "F" determine the following -
	1	For 2009 only - determine the interim tax expense by completing the schedule on tab I
			Consider only pre-tax income, perms and credits from facts tab. Assume no VA recorded for this portion of the exercise.
	2	Prepare a current provision and deferred rollforward schedule for each of the years 2009 through 2012.
			see example for 2009 at tabs C and D
	3	Compute the 2011 provision-to-return JE and post as part of the 2012 provision
			- use the template on tab P as a guide
	4	Complete the Tax Account Analysis schedule tab TA for each year 2009 to 2012.
			Note - actual taxes paid are reflected on this tab
	5	Complete a Rate Reconciliation schedule tab R for each year 2009 to 2012.
			see example for 2009
	6	Prepare a current and deferred tax provision for Foxtrot Corporation for the year 2012 (in FC and RC).
			- see facts at tab FC and complete the yellow highlighted cells in the trial balance.
	7	For 2012 only - create the Consolidated Income Tax footnotes (with 2011 comparison) (i.e., Delta + Foxtrot).
			- use the templates on tab FS as a guide
	Please show all your work (to provide for maximum credit).
	Feel free to add columns, rows, & worksheets as necessary to complete the above tasks
	Please reference your workpapers to make the review easier.
	Note - there are hidden columns on tabs C, D, and P that you may want to use

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F - Delta Facts

DELTA Corporation
FACTS								link
DELTA is a "C" corporation (SEC registrant) operating entirely within the U.S. on the basis of a calendar year end. Delta was formed 1/1/2009.
		Year 2009		Year 2010		Year 2011			Year 2012
		per return		per return		per provision	per return (only if different)		per provision
Federal Tax Rate		35%		35%		35%			35%
States -		100% NV - 0% rate		100% NV - 0% rate		100% OR @ 7.6% flat tax rate			80% OR @ 7.6% rate
									20% IL @ 7.00% flat tax rate
Assume no fed/state differences other than state tax deduction which is not deductible for state tax purposes.
Assume states do not have an AMT tax concept.
Assume headquarters moved from Reno Nevada to Portland Oregon on 1/1/2011. Assume began operations in Illinois on 1/1/2012. [Hint - Prior YE deferred tax balance should not anticipate this change].
Assume federal deduction for state taxes is on a "current" basis (i.e., federal deduction = state "current" tax expense)
Research expense: assume book = regular tax expense. In addition, assume yearly research expense is amortized over 10 years for AMT purposes
Fed regular = state tax depreciation		see tab FA for details
Fed AMT tax depreciation		see tab FA for details
Organizational expenses (incurred 1/1/2009) are expensed immediately for book purposes. For income tax purposes (pursuant to IRC Sec 248), the 1st $5,000 is expensed immediately with the remainder amortized SL over 180 months
IRC Sec. 263A Inventory Absorption % on gross ending inventory per BS		2.0%		2.2%		2.2%			2.3%
[Hint: EOY inventory capitalization DTA = EOY gross inventory x absorption ratio for year. Book/Tax difference equals EOY Inventory capitalization less BOY Inventory capitalization. See 2009 & 2010 Current Prov detail for example.]
Vacation paid w/in 2.5 months after YE		$ - 0		$ 20,000		$ - 0	$ 15,000		$ 30,000
Add'l penalty expense discovered w/in "misc expense"		$ - 0		$ - 0		$ - 0	$ 5,000		$ - 0
Research Tax Credit Generated (IRC Sec 280C election taken) - federal only		$ 12,800		$ 19,500		$ - 0			$ - 0
The investment in Echo Development, LLC is accounted for using the equity method of accounting and includes the $100,000 cash contribution (for both book and tax purposes) made by Delta Corporation on 1/1/2011 and Delta Corporation's $60,000 share of Echo Development's book income for the year ended 12/31/2011 and $40,000 book income for the year ended 12/31/2012.
Schedule K1s received from Echo Development, LLC reflect net rental real estate income as follows -						$ 40,000	$ 50,000		$ 50,000
ISOs granted -
Grant Date				December 1, 2009
ISO issued to (non-officer)				employee Douglas
# ISOs granted				2,000
Exercise price per ISO				$ 10
FMV at date of Grant				$ 10
Cliff vesting period [i.e., all vest at end of 2 years]				2 years
Vesting / Exercise Date				December 1, 2011
FMV at vesting date				$ 16
Sale Date				December 31, 2012
FMV at date of Sale				$ 20
Non-Quals stock options granted -
Grant Date				December 31, 2009
Options issued to (non-officer)				employee Mildred
# Options granted				24,000
Exercise price per option				$ 8
FMV option at date of Grant				$ 8
FMV stock at date of Grant				$ 16
S/L Vesting period [i.e., 1/3 vest each year]				3 years
Exercise date #1				June 15, 2011
Per share FMV at exercise date #1				$ 16
Number of options exercised on date #1				6,000
Exercise date #2				December 31, 2012
Per share FMV at exercise date #2				$ 20
Number of options exercised on date #2				18,000
Sale Date				no sale through 12/31/2012
Zero opening APIC Pool, post any "windfalls" to Additional-Paid-in-Capital "APIC" (B/S)
Valuation Allowance -
Delta recorded a full valuation allowance against its deferred tax assets in 2009.
In 2010 Delta determined that it was more likely than not that it would be able to utilize all of its deferred tax assets.
FIN 48 analysis -
Prior to 2012 Delta had taken the position that it had no uncertain tax positions, thus it had not recorded any FIN 48 entries.
During the preparation of the 2012 tax provision Delta uncovered a few errors in prior tax returns as follow -
- A review of the liability accounts revealed that Delta's "Other Accrued Liability" account actually relates to a legal reserve that has not been settled as of 12/31/2011.
- Delta determined that the R&D credit generated in 2009 and 2010 was overstated by $2,000 and $3,000 respectively.
Delta has decided not to amend prior returns, but will instead record a FIN 48 liability as part of its 2012 year-end tax provision
Assume a penalty rate of 3% and an interest rate of 6% (fed & state). Delta has elected to record FIN 48 interest and penalties as part of its tax provision expense.
Interest and penalties are computed from the original due date of the impacted tax return to the end of the financial statement year.
Assume FIN 48 Interest is not deductible for federal or state tax purposes.
Foreign Operations -
Delta Corporation formed Foxtrot Corporation on 1/1/2012 as a wholly-owned subsidiary of Delta Corporation - see tab FC for details.
TRIAL BALANCE - DELTA Corporation
yellow cells in TB need to be completed as part of Exam
Dr (Cr)		Year 2009		Year 2010		Year 2011			Year 2012
Balance Sheet
Cash & ST Investments		80,000		400,000		300,000			1,350,000
Accounts Receivable		50,000		385,000		1,800,000			2,900,000
Allowance for Doubtful Accounts		-		-		(100,000)	C		(120,000)	C
Inventory (gross before reserve)		100,000	C	200,000	C	260,000	C		300,000	C
Inventory Obsolescence Reserve [hint: temp] YourNameHere: Inventory Obsolescence Reserve: Reserve established against estimated inventory that will be disposed at zero sales price (i.e., thrown-out as obsolete) rather than being sold.		-		(50,000)	C	(70,000)	C		(40,000)	C
Investment in Echo Development, LLC		-		-		160,000			200,000
Investment in Foxtrot Corporation		-		-		-		FC	100,000
Deferred Tax Asset/(Liability) - Current		-	TA	149,583	TA			TA
Fixed Asset, cost	FA	200,000		270,000		710,000			950,000
Fixed Asset, Accum Depr.	FA	(20,000)		(47,000)		(88,000)			(153,000)
Total Assets		$ 410,000		$ 1,307,583		$ 2,972,000			$ 5,487,000
Accounts Payable		(110,067)		(229,067)		(1,022,900)			(742,601)
Vacation Payable		-		(20,000)		(40,000)			(50,000)
Income Tax (Payable)/Receivable		-	TA	2,325	TA	(348,622)		TA	(1,235,040)
Other Accrued Liabilities		-		-		(100,000)			(100,000)
Deferred Tax Asset/(Liability) - Non-Current		-		-		-		TA
FIN 48 (Liability) - Non-Current		-		-		-		TA
Long-Term Debt (to 3rd party bank)		(400,000)		(800,000)		(600,000)			(800,000)
Common Stock		(100)		(100)		(100)			(100)
APIC		(200,833)		(274,833)		(348,000)			(412,000)
Retained Earnings - BOY		-		301,000		51,000			(1,111,000)
Current year earnings		301,000		(250,000)		(1,162,000)			(2,690,000)
Total Liabilities & Equity		$ (410,000)		$ (1,270,675)		$ (3,570,622)			$ (7,140,741)
		-		36,908		(598,622)			(1,653,741)
Income Statement
Sales		(4,000,000)		(8,000,000)		(10,800,000)			(11,300,000)
Cost of Goods sold		1,500,000		3,000,000		3,625,000			3,230,000
Officer's base salary expense (President)		400,000		850,000		1,200,000			1,050,000
Officer's base salary expense (CFO)		250,000		600,000		855,000			1,010,000
Salary expense (non-officers)		1,000,000		1,600,000		2,200,000			1,800,000
Benefits expense (includes vacation, bonus, etc.)		200,000		320,000		440,000			360,000
ISO compensation expense		833	C	10,000	C	9,167	C		-	C
Non-Qual comp expense		-		64,000	C	64,000	C		64,000	C
Payroll tax & license expense		400,000		640,000		880,000			720,000
Penalty expense		-	C	2,000	C	1,000	C		4,000	C
Meals & Entertainment expense		20,000	C	30,000	C	44,000	C		50,000	C
Rent expense		200,000		200,000		-			100,000
Supplies expense		19,667		9,000		10,833			49,000
Organizational expense		50,000	C	-		-			-
Bad Debt expense		5,500		20,000		100,000			10,000
Depreciation expense	FA	20,000	C	27,000	C	41,000	C		65,000	C
<Income> Loss from Echo Development, LLC		-		-		(60,000)	C		(40,000)	C
Research expenses		200,000	C	300,000	C	-			-
Other Misc expenses		11,000		25,000		164,000			60,000
Charitable contribution expense		-		5,000		40,000			30,000
Interest income (tax exempt both fed & state)		-	C	-	C	(12,000)	C		-	C
Interest expense		24,000		48,000		36,000			48,000
Pre-tax (Income)/ Loss		301,000	C	(250,000)	C	(1,162,000)	C		(2,690,000)	C
Income tax expense / (benefit)		-
Net (Income) / Loss		$ 301,000		$ (250,000)		$ (1,162,000)			$ (2,690,000)

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FA - Fixed Asset rollforward

DELTA Corporation (only)
Fixed Asset Rollforward Schedule							input
							link
		Assume all acquisitions purchased on January 1 each year.
		Assume no dispositions during years shown (i.e., when move HQ they transfer all assets to new location)
		Note - this schedule provides far more detail than is necessary for this Exam.
		Assume elected out of all bonus depreciation
				initial yr
				12/31/2009	2010 adds	12/31/2010	2011 adds	12/31/2011	2012 adds	12/31/2012
	Fixed Asset Cost
	Building			-	-	-	400,000	400,000	-	400,000
	Machinery			100,000	50,000	150,000	20,000	170,000	130,000	300,000
	Furniture			100,000	20,000	120,000	20,000	140,000	110,000	250,000
	Total cost			200,000	70,000	270,000	440,000	710,000	240,000	950,000
				F		F		F		F
	Book Depreciation
	Building	40 yr	SL	-	-	-	10,000	10,000	10,000	20,000
	Machinery	10 yr	SL	10,000	15,000	25,000	17,000	42,000	30,000	72,000
	Furniture	10 yr	SL	10,000	12,000	22,000	14,000	36,000	25,000	61,000
	Total Book Depr.			20,000	27,000	47,000	41,000	88,000	65,000	153,000
				F	F	F	F	F	F	F
	Net Book Value			180,000		223,000		622,000		797,000
											Regular	Regular
	Regular Tax Depreciation										5-yr	7-yr
	Building	39.5 yr	SL	-	-	-	10,127	10,127	10,127	20,254	20.00%	14.29%
											32.00%	24.49%
	Machinery	5 yr	200% MACRS	20,000	42,000	62,000	39,200	101,200	53,520	154,720	19.20%	17.49%
		assume 1/2 year convention									11.52%	12.49%
	Furniture	7 yr	200% MACRS	14,290	27,348	41,638	25,246	66,884	36,605	103,489	11.52%	8.93%
		assume 1/2 year convention									5.76%	8.92%
	Total Regular Tax Depr.			34,290	69,348	103,638	74,573	178,211	100,252	278,463		8.93%
				C	C		C		C			4.46%
	Net Tax Value			165,710
											AMT	AMT
	AMT Tax Depreciation										5-yr	7-yr
											SL	SL
	Building	39.5 yr	SL	-	-	-	10,127	10,127	10,127	20,254	10.00%	7.14%
											20.00%	14.29%
	Machinery	5 yr	SL	10,000	25,000	35,000	32,000	67,000	47,000	114,000	20.00%	14.29%
		assume 1/2 year convention									20.00%	14.28%
	Furniture	7 yr	SL	7,140	15,718	22,858	18,576	41,434	27,850	69,284	20.00%	14.29%
		assume 1/2 year convention									10.00%	14.28%
	Total AMT Tax Depr.			17,140	40,718	57,858	60,703	118,561	84,977	203,538		14.29%
				C	C		C		C			7.14%

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FC - Foxtrot Facts

Foxtrot Corporation
FACTS		Final Exam Question #6			input
Year Ended December 31, 2012
Task - Compute the 2012 current and deferred tax provision for Foxtrot Corporation and complete the yellow highlighted portions of the trial balance.
Delta Corporation formed Foxtrot Corporation on 1/1/2012 as a wholly-owned subsidiary of Delta Corporation.
Foxtrot Corporation operates entirely within Country Z where the statutory income tax rate is 20%.
The Functional Currency in Country Z is Z$
Foxtrot Corporations' Reporting Currency is the US Dollar.
Fines & Penalties are 50% deductible for income tax purposes in Country Z.
Reserves for bad debts are currently deductible on an accrual basis in Country Z [hint: no temporary difference].
Warranties are deductible on a cash basis only in Country Z.
Tax depreciation computed under the income tax laws of Country Z is Z$ 2,000,000 for 2012.
Foxtrot Corporation has not made any tax payments during 2012 to Country Z taxing authorities.
Delta Corporation has made an APB 23 election with respect to Foxtrot Corporation for 2012.
Weighted average FX 2012:	F$ to US$	1:1
FX rate at 12/31/2012:	F$ to US$	1:1.1
Below is the Trial Balance of Foxtrot Corporation prior to posting the YE tax provision -
		Dr(Cr)
		Year Ended December 31, 2012
		FC		US Dollar
		Functional Currency of Country Z	FX Rate	Reporting Currency
Current Assets
Cash		500,000	1.1	550,000
Accounts receivable		2,000,000	1.1	2,200,000
Reserve for bad debts		(500,000)	1.1	(550,000)
Noncurent Assets
Fixed assets		6,000,000	1.1	6,600,000
Accumulated depreciation		(1,000,000)	1.1	(1,100,000)
Total Assets		7,000,000		7,700,000
Current Liabilities
Accounts payable		(5,600,000)	1.1	(6,160,000)
Accrued warranties		(800,000)	1.1	(880,000)
Current taxes (payable) / receivable		-	1.1	-
Deferred tax asset / (liability)		-	1.1	-
Equity
Common Stock		(100,000)	Historical	(100,000)
BOY Retained earnings		-	Historical	-
Book <income> loss		(500,000)	Historical	(500,000)
Cumulative translation adjustment			Calculated	(60,000)
Total Liabilities & Equity		(7,000,000)		(7,700,000)
		-		-
Income Statement
Revenue		(7,500,000)	1.0	(7,500,000)
Cost of goods sold		2,500,000	1.0	2,500,000
Bad debt expense		500,000	1.0	500,000
Depreciation		1,000,000	1.0	1,000,000
Fines & penalties		500,000	1.0	500,000
Other		2,500,000	1.0	2,500,000
Pre-tax (Income)/ Loss		(500,000)		(500,000)
Income tax expense / (benefit)		-	1.0	-
Net (Income) / Loss		(500,000)		(500,000)

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I - 2009 Interim schedule

DELTA Corporation (only)
2009 Interim Reporting			Final Exam Question #1
	The below table lists (in column C of rows 9 to 12) pre-tax income for each quarter in 2009
	Task - Complete the amounts in column E
		Consider only pre-tax income, perms and credits. Assume no VA recorded for this portion of the exercise (i.e., credits useable).
		Use the data provided on tabs F and C as the basis for your 2009 interim calculations
	Reporting Period	Q Ordinary Income <Loss>	YTD Ordinary Income <Loss>	YTD Tax Expense <Benefit>	Less Previously Reported	Reporting Period Only
	Q1	100,000	100,000		-	-
	Q2	(200,000)	(100,000)		-	-
	Q3	(400,000)	(500,000)		-	-
	Q4	199,000	(301,000)		-	-
	Annual	(301,000)				-
	[Hint: there is a perm that isn't known until Q4]

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C - Current Prov

DELTA Corporation (only)
Current Provision Calculation							input
							link
							not used
			2009						2010						2011									2012
				Federal			State		Federal	Federal			State		Federal	Federal				State	State			Federal	Federal							State	State
			(Dr) / Cr	Dr / (Cr)	Dr / (Cr)		(Dr) / Cr		(Dr) / Cr	Dr / (Cr)	Dr / (Cr)		(Dr) / Cr		(Dr) / Cr	Dr / (Cr)		Dr / (Cr)		(Dr) / Cr	Dr / (Cr)	Dr / (Cr)		(Dr) / Cr	Dr / (Cr)		Dr / (Cr)		Dr / (Cr)	Dr / (Cr)		(Dr) / Cr	Dr / (Cr)	Dr / (Cr)	Dr / (Cr)	Dr / (Cr)
			payable (B/S)	Expense (I/S)	Deferred (B/S)		payable (B/S)		payable (B/S)	Expense (I/S)	Deferred (B/S)		payable (B/S)		payable (B/S)	Expense (I/S)		Deferred (B/S)		payable (B/S)	Expense (I/S)	Deferred (B/S)		payable (B/S)	Expense (I/S)		Deferred (B/S)		FIN 48 payable	APIC		payable (B/S)	Expense (I/S)	Deferred (B/S)	FIN 48 payable	APIC
Pre-tax Income/(Loss)		F	(301,000)	(301,000)			(301,000)	F	250,000	250,000			250,000	F	1,162,000	1,162,000	FS			1,162,000	1,162,000		F	2,690,000	2,690,000	FS						2,690,000	2,690,000
Permanent Differences
	Penalties	F	-	-			-	F		-			-	F		-	FS			-	-		F		-	FS						-	-
	Meals & Entertainment	Note 1	10,000	10,000			10,000		-	-			-		-	-	FS			-	-			-	-	FS						-	-
	Stock Comp Expense	F	833	833			833	F		-			-	F		-	FS			-	-		F	-	-	FS						-	-
	Other - Perm #1		-	-			-		-	-			-	F		-	FS			-	-		F		-	FS						-	-
	Other - Perm #2	F	-	-			-	F		-			-	F		-	FS			-	-		F	-	-	FS						-	-
	Subtotal Perm Differences		10,833	10,833	-		10,833		-	-	-		-		-	-		-		-	-	-		-	-		-		-	-		-	-	-	-	-
	Pre-Tax + Perms		(290,167)	(290,167)	-		(290,167)		250,000	250,000	-		250,000		1,162,000	1,162,000		-		1,162,000	1,162,000	-		2,690,000	2,690,000		-		-	-		2,690,000	2,690,000	-	-	-
State Tax Deduction			-	-	-				-	-	-				-	-		-						-	-		-		-	-
Temporary Differences
	Other - Reserve #1	Note 6	-		-		-		-		-		-		-			-	D	-		-		-			-	D				-		-
	263A Inventory Capitalization	Note 2	2,000		2,000	D	2,000		2,400		2,400	D	2,400		-			-	D	-		-		-			-	D				-		-
	Inventory Reserve	Note 5	-		-	D	-		-		-	D	-		-			-	D	-		-		-			-	D				-		-
	Non-Qual Stock Comp per books	F	-		-		-	F			-		-	F				-		-		-	F				-					-		-
	Non-Qual Stock Comp per tax		-		-	D	-		-		-	D	-	F				-	D	-		-	F		F			D	F	-		-		-		-
	Other - Reserve #2	Note 7	-		-	D	-		-		-	D	-		-			-	D	-		-		-			-	D				-		-
	Book Depreciation	F	20,000		20,000		20,000	F			-		-	F				-		-		-	F				-					-		-
	Tax Depreciation	FA	(34,290)		(34,290)	D	(34,290)	FA			-	D	-	FA				-	D	-		-	FA				-	D				-		-
	Organizational Expense	Note 3	42,000		42,000	D	42,000		-		-	D	-		-			-	D	-		-		-			-	D				-		-
	Other - Adj. per books	F	-		-		-	F			-		-	F				-		-		-	F				-					-		-
	Other - Adj. per tax		-		-	D	-		-		-	D	-	F				-	D	-		-	F				-	D				-		-
	Other - Reserve #3		-		-		-		-		-		-		-			-		-		-		-	F			D	-			-		-	-
	Subtotal Temp Differences		29,710	-	29,710		29,710		2,400	-	2,400		2,400		-	-		-		-	-	-		-	-		-		-	-		-	-	-	-	-
Regular Taxable Income/(Loss)			(260,457)	(290,167)	29,710		(260,457)		252,400	250,000	2,400		252,400		1,162,000	1,162,000		-		1,162,000	1,162,000	-		2,690,000	2,690,000		-		-	-		2,690,000	2,690,000	-	-	-
	NOL C/F Generated / (Utilized)		260,457		260,457	D	260,457	D			-	D	-		-			-		-		-		-			-					-		-
Regular Taxable Income/(Loss) after NOL			-	(290,167)	290,167		-		252,400	250,000	2,400		252,400		1,162,000	1,162,000		-		1,162,000	1,162,000	-		2,690,000	2,690,000		-		-	-		2,690,000	2,690,000	-	-	-
Tax Rate		F	35%	35%	35%	F	0%	F	35%	35%	35%	F	0%	F	35%	35%		35%	F		0.0%	0.0%	F	35%	35%		35%		35%	35%	F		0.00%	0.00%	0.00%	0.00%
Tax b4 credits			-	(101,558)	101,558		-		88,340	87,500	840		-		406,700	406,699		-		-	-	-		941,500	941,500		-		-	-		-	-	-	-	-
AMT Tax Credit			-		-		-		-		-		-		-			-	D	-	-	-	D	-			-					-	-	-
R&E Tax Credit			-	(12,800)	12,800	D	-		-	-		D	-	D		-		-	D	-	-	-	D	-	-	1	-	F				-	-	-
AMT Adjustments			-	-	-				-		-	D			-			-						-			-
Valuation Allowance Adjustment				114,358	(114,358)						-					-		-				D			-		-							D
Tax Rate Adjustment							-						-							-	-	-										-	-	-
Current Year Tax after credits			-	-	-		-		88,340	87,500	840		-		406,700	406,699		-		-	-	-		941,500	941,500		-		-	-		-	-	-	-	-
State Tax after credits			-						-						-	-		-			FS			-	-		-		-	-			FS
FIN 48 Interest			-						-						-	-		-							-	1			-
FIN 48 Penalty			-						-						-	-		-							-	1			-
Total CY Federal + State Tax after credits			-						88,340						406,700	406,699		-						941,500	941,500		-		-	-
																									-	= sum 1
AMT Calculation -																									FS				FIN 48 Liability all relates to Calendar 2011
Regular taxable income / (loss)			(260,457)						252,400						1,162,000									2,690,000					-	FIN 48 Tax Liability (fed + state)
plus regular tax depreciation			34,290						-						-									-					-	Penalty @ 3% of tax
less AMT tax depreciation		FA	(17,140)																										-	Interest @ 6% of tax
plus research tax expense		F	200,000												-									-						3/15/2012 to 12/31/2012 = 290 days
less AMT research expense amortization		Note 4	(20,000)						-						-									-
less AMT NOL C/F			-						(63,307)						-									-
AMT Taxable Income / (Loss)			(63,307)						189,093						1,162,000									2,690,000
AMT tax rate			20%						20%						20%									20%
AMT tax			-						37,819						232,400									538,000
Regular tax			-						88,340						406,700									941,500
AMT Adj.			-						-						-									-
Supporting Calculations
Note 1	Meals & Ent Adj.
	Meals & Ent expense per books	F	20,000					F						F									F
	disallowance %		50.0%						50.0%						50.0%									50.0%
	Disallowed Meals Expense		10,000						-						-									-
Note 2	263A Inventory Adj.
	EOY Inventory per BS	F	100,000					F	200,000					F									F
	263A absorption ratio	F	2.0%					F	2.2%					F									F
	EOY Inventory Capitalization Adj.		2,000						4,400						-									-
	BOY Inventory Capitalization Adj.		-						2,000															-
	current change in 263A Adj.		2,000						2,400						-									-
Note 3	Organizational Exp
	Book Organizational Expense	F	50,000	c				F	-					F	-								F	-
	Tax immediate expense		(5,000)	a
	Capitalized Tax Org Costs		45,000												-									-
	total tax amortization period in months		180						180						180									180
	monthly amortization		250						-						-									-
	months in year		12						12						12									12
	annual tax amort Org costs		3,000	b					-						-									-
	2009 Tax Org Cost expense	b-a	8,000	d					-						-									-
	Book > Tax Org Cost	c-d	42,000						-						-									-
Note 4	AMT research Expense Amort.
	Book/regular tax research expense	F	200,000					F						F									F
	AMT amortization period in years		10						10						10									10
	AMT research amort. on CY adds		20,000						-						-									-
								AMT research amort. on PY adds							-									-
								Total AMT amort.	-						-									-
Note 5	Inventory Reserve
	EOY reserve	F	-					F
	BOY reserve		-					F	-						-									-
	Net change in reserve - CY		-						-						-									-
Note 6	Other - Reserve #1
	EOY reserve	F	-					F						F									F
	BOY reserve		-					F							-									-
	Net change in reserve - CY		-						-						-									-
Note 7	Other - Reserve #2
	EOY reserve							F						F									F
	less amt paid w/in 2.5 months of YE							F						F									F
	BOY reserve		-					F						F	-								F	-
	less amt paid w/in 2.5 months of YE		-					F						F	-								P		per return
	Net change in reserve - CY		-						-						-									-

&Z&F Printed on: &D &T Page &P of &N

P - Prov-Return

DELTA Corporation (only)
Provision-to-Return		Final Exam Question #3
Calendar 2011		Task - Prepare a Provision-to-Return Reconciliation for 2011 and post the resulting entry as part of the 2012 YE tax provision.
						(Dr) / Cr	Dr / (Cr)	Dr / (Cr)				(Dr) / Cr	Dr / (Cr)	Dr / (Cr)
						payable (B/S)	Expense (I/S)	Deferred (B/S)				payable (B/S)	Expense (I/S)	Deferred (B/S)
			Federal							State
			per Provision		per Return	Difference				per Provision	per Return	Difference
Pre-tax Income/(Loss)		C			-	-	-		C		-	-	-
Permanent Differences
	Penalties	C		F		-	-		C		-	-	-
	Meals & Entertainment	C			-	-	-		C		-	-	-
	Stock Comp Expense	C			-	-	-		C		-	-	-
	Other - Perm #1	C			-	-	-		C		-	-	-
	Other - Perm #2	C			-	-	-		C		-	-	-
	Subtotal Perm Differences		-		-	-	-	-		-	-	-	-	-
	Pre-Tax + Perms		-		-	-	-	-		-	-	-	-	-
State Tax Deduction		C			-	-	-	-
Temporary Differences
	Other - Reserve #1	C			-	-		-	C		-	-		-
	263A Inventory Capitalization	C			-	-		-	C		-	-		-
	Inventory Reserve	C			-	-		-	C		-	-		-
	Non-Qual Stock Comp per books	C			-	-		-	C		-	-		-
	Non-Qual Stock Comp per tax	C			-	-		-	C		-	-		-
	Other - Reserve #2	C				-		-	C		-	-		-
	Book Depreciation	C			-	-		-	C		-	-		-
	Tax Depreciation	C			-	-		-	C		-	-		-
	Organizational Expense	C			-	-		-	C		-	-		-
	Other - Adj. per books	C			-	-		-	C		-	-		-
	Other - Adj. per tax	C		F		-		-	C		-	-		-
	Other - Reserve #3	C			-	-		-	C	-	-	-		-
	Subtotal Temp Differences		-		-	-	-	-		-	-	-	-	-
Regular Taxable Income/(Loss)			-		-	-	-	-		-	-	-	-	-
	NOL C/F Utilized	C	-		-	-		-		-	-	-		-
Regular Taxable Income/(Loss) after NOL			-		-	-	-	-		-	-	-	-	-
Tax Rate		C	35%		35%	35%	35.0%	35.0%	C	0.0%	0.0%	0.0%	0.0%	0.0%
Tax b4 credits			-		-	-	-	-		-	-	-	-	-
AMT Tax Credit		C			-	-		-	C		-	-		-
R&E Tax Credit		C			-	-		-	C		-	-		-
AMT Adjustments		C			-	-		-	C		-	-		-
Current Year Tax after credits			-		-	-	-	-		-	-	-	-	-
State Tax after credits			-		-	-	-	-
Total CY Federal + State Tax after credits			-		-	-	-	-
							R
AMT Calculation -
Regular taxable income			-		-
less regular tax depreciation			-		-
plus AMT tax depreciation		C			-
less research tax expense		C			-
plus AMT research expense amortization		C			-
less AMT NOL C/F		C			-
AMT Taxable (Income)/Loss			-		-
AMT tax rate			20%		20%
AMT tax			-		-
Regular tax			-		-
AMT Adj.			-		-
Note 7	Vacation Accrual
	EOY reserve	C		F
	less amt paid w/in 2.5 months of YE	C		F
	BOY reserve	C			-
	less amt paid w/in 2.5 months of YE	C			-
	Net change in reserve - CY		-		-

&Z&F Printed on: &D &T

D - Deferred Rollforward

DELTA Corporation (only)
Deferred Tax Rollforward Schedule							input
							link
Dr (Cr)																																														Federal BOY					Federal + State BOY					Federal EOY					Federal + State EOY
		2009 GROSS								2010 GROSS					2011 GROSS						2012 GROSS			2009 Tax Effected								2010 Tax Effected					2011 Tax Effected				2012 Tax Effected			Tax effected at FYE 12/11					Tax effected at FYE 12/11					Tax effected at FYE 12/12					Tax effected at FYE 12/12
		BOY	PY		CY Activity		EOY	PY		CY Activity		EOY	PY		CY Activity		EOY		2011		CY Activity		EOY	BOY	PY		CY Activity	Rate Adj. /	EOY	PY		CY Activity	Rate Adj. /	EOY	PY		CY Activity	Rate Adj. /	EOY	2011	CY Activity	Rate Adj. /	EOY	Current			Non-Current		Current			Non-Current		Current			Non-Current		Current			Non-Current
	C/NC	1/1/09	True-up		2009	Other Adj.	12/31/09	True-up		2010	Other Adj.	12/31/10	True-up		2011	Other Adj.	12/31/11		True-up		2012	Other Adj.	12/31/12	1/1/09	True-up		2009	Other	12/31/09	True-up		2010	Other	12/31/10	True-up		2011	Other	12/31/11	True-up	2012	Other	12/31/12	Asset	Liability		Asset	Liability	Asset	Liability		Asset	Liability	Asset	Liability		Asset	Liability	Asset	Liability		Asset	Liability
FEDERAL																								35%	35%		35%		35%	35%		35%		35%	35%		35%		35%	35%	35%		35%
Other - Reserve #1	C	-	-	C	-	-	-	-	C	-	-	-	-	C	-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-		-	-
263A Capitalization	C	-	-	C	2,000	-	2,000	-	C	2,400	-	4,400	-	C	-	-	4,400	P	-	C	-	-	4,400	-	-		700	-	700	-		840	-	1,540	-		-	-	1,540	-	-	-	1,540	1,540	-		-	-	1,540	-		-	-	1,540	-		-	-	1,540	-		-	-
Inventory Reserve	C	-	-	C	-	-	-	-	C	-	-	-	-	C	-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-		-	-
Non-Qual Stock Option Comp	NC	-	-	C	-	-	-	-	C	-	-	-	-	C	-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-		-	-
Other - Reserve #2	C	-	-	C	-	-	-	-	C	-	-	-	-	C	-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-		-	-
Fixed Asset Depreciation	NC	-	-	C	(14,290)	-	(14,290)	-	C	-	-	(14,290)	-	C	-	-	(14,290)	P	-	C	-	-	(14,290)	-	-		(5,002)	-	(5,002)	-		-	(1)	(5,002)	-		-	-	(5,002)	-	-	-	(5,002)	-	-		-	(5,002)	-	-		-	(5,002)	-	-		-	(5,002)	-	-		-	(5,002)
Organizational Costs	NC	-	-	C	42,000	-	42,000	-	C	-	-	42,000	-	C	-	-	42,000	P	-	C	-	-	42,000	-	-		14,700	-	14,700	-		-	-	14,700	-		-	-	14,700	-	-	-	14,700	-	-		14,700	-	-	-		14,700	-	-	-		14,700	-	-	-		14,700	-
Net Operating Loss	C	-	-	C	260,457	-	260,457	-	C	-	-	260,457	-	C	-	-	260,457		-	C	-	-	260,457	-	-		91,160	-	91,160	-		-	-	91,160	-		-	-	91,160	-	-	-	91,160	91,160	-		-	-	91,160	-		-	-	91,160	-		-	-	91,160	-		-	-
Other - Adj.	NC	-	-	C	-	-	-	-		-	-	-	-		-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-		-	-
Other - Reserve #3	NC	-	-		-	-	-	-		-	-	-	-		-	-	-		-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-		-	-
State Taxes	NC	-	-		-	-	-	-		-	-	-	-		-	-	-		-		-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-		-	-
Subtotal		-	-		290,167	-	290,167	-		2,400	-	292,567	-		-	-	292,567		-		-	-	292,567	-	-		101,558	-	101,558	-		840	(1)	102,398	-		-	-	102,398	-	-	-	102,398
AMT Tax Credit	C																							-	-		-	-	-	-	C	-	-	-	-	C	-	-	-	-	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-		-	-
R&E Tax Credit																								-	-	F	12,800	-	12,800	-	F		-	12,800	-	F	(12,800)	-	-	-	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-		-	-
Federal Tax after Credits																								-	-		114,358	-	114,358	-		840	(1)	115,198	-		(12,800)	-	102,398	-	-	-	102,398	92,700	-		14,700	(5,002)	92,700	-		14,700	(5,002)	92,700	-		14,700	(5,002)	92,700	-		14,700	(5,002)
Less VA																								-	-		(114,358)	-	(114,358)	-		-		(114,358)	-		-		(114,358)	-	-		(114,358)
Federal Tax after VA																								-	-		-	-	-	-		840	(1)	840	-		(12,800)	-	(11,960)	-	-	-	(11,960)	92,700			9,698		92,700			9,698		92,700			9,698		92,700			9,698
State Tax after VA																								-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-																TA			TA
Total Tax after VA																								-	-		-	-	-	-		840	(1)	840	-		(12,800)	-	(11,960)	-	-	-	(11,960)
																													TA					TA					TA				TA
																																														State BOY										State EOY
		2009 GROSS								2010 GROSS					2011 GROSS						2012 GROSS			2009 Tax Effected								2010 Tax Effected					2011 Tax Effected				2012 Tax Effected			Tax effected at FYE 12/11										Tax effected at FYE 12/12
		BOY	PY		CY Activity		EOY	PY		CY Activity		EOY	PY		CY Activity		EOY		2011		CY Activity		EOY	BOY	PY		CY Activity	Rate Adj. /	EOY	PY		CY Activity	Rate Adj. /	EOY	PY		CY Activity	Rate Adj. /	EOY	2011	CY Activity	Rate Adj. /	EOY	Current			Non-Current							Current			Non-Current
		1/1/09	True-up		2009	Other Adj.	12/31/09	True-up		2010	Other Adj.	12/31/10	True-up		2011	Other Adj.	12/31/11		True-up		2012	Other Adj.	12/31/12	1/1/09	True-up		2009	Other	12/31/09	True-up		2010	Other	12/31/10	True-up		2011	Other	12/31/11	True-up	2012	Other	12/31/12	Asset	Liability		Asset	Liability						Asset	Liability		Asset	Liability
STATE																								0%	0%		0%		0%	0%		0%		0.0%	0%
Other - Reserve #1	C	-	-	C	-	-	-	-		-	-	-	-	C	-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
263A Capitalization	C	-	-	C	2,000	-	2,000	-	C	2,400	-	4,400	-	C	-	-	4,400	P	-	C	-	-	4,400	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
Inventory Reserve	C	-	-	C	-	-	-	-		-	-	-	-	C	-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
Non-Qual Stock Option Comp	NC	-	-	C	-	-	-	-		-	-	-	-	C	-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
Other - Reserve #2	C	-	-	C	-	-	-	-		-	-	-	-	C	-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
Fixed Asset Depreciation	NC	-	-	C	(14,290)	-	(14,290)	-	C	-	-	(14,290)	-	C	-	-	(14,290)	P	-	C	-	-	(14,290)	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
Organizational Costs	NC	-	-	C	42,000	-	42,000	-	C	-	-	42,000	-	C	-	-	42,000	P	-	C	-	-	42,000	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
Net Operating Loss	C	-	-	C	-	-	-	-		-	-	-	-		-	-	-		-		-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
Other - Adj.	NC	-	-	C	-	-	-	-		-	-	-	-	C	-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
Other - Reserve #3	NC	-	-		-	-	-	-		-	-	-	-		-	-	-	P	-	C	-	-	-	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
Subtotal		-	-		29,710	-	29,710	-		2,400	-	32,110	-		-	-	32,110		-		-	-	32,110	-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-	-		-	-						-	-		-	-
State Tax Credits																								-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-
State Tax after Credits																								-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-	-			-							-			-
Less VA																								-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-
State Tax after VA																								-	-		-	-	-	-		-	-	-	-		-	-	-	-	-	-	-
																																					C	C			C	C

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TA - Tax Account Recon

DELTA Corporation & Subsidiary
Tax Account Rollforward Schedule					input		Final Exam Question #4
					link		Task - Complete the below Tax Account Rollforward schedule. [Hint: complete the links in the blue cells].
Dr (Cr)							[Add'l hint: confirm the accuracy of your calculations by comparing to the Delta Trial Balance amounts at tab F].
			Taxes (Payable)/Receivable (B/S)						FIN 48 (Payable) / Receivable (B/S)					Deferred Tax (B/S)								Tax Expense (I/S)
		Federal	State	Foreign	Total		Federal	State	Interest	Penalty	Total		Current	Non-Current	Valuation Allowance	Total		APIC	CTA		Current	Deferred	Total		Cash	cross-foot check
Balance at 1/1/2009		-	-	-	-		-	-	-	-	-		-	-	-	-		-	-
2009 Estimated Taxes Paid		-	-	-	-						-														-	-
													assume all deferreds are "current" for 2009 for simplicity
2009 Tax Provision	C	-	-	-	-		-	-	-	-	-		114,358	-	(114,358)	-		-	-		-	-	-	F		-
Balance at 12/31/2009		-	-		-		-	-	-	-	-		114,358	-	(114,358)	-	F
2010 Estimated Taxes Paid		115,000	-	-	115,000																				(115,000)	-
2009 Prov-Return True-up		-	-	-	-		-	-	-	-	-		-	-	-	-		-	-		-	-	-			-
													assume all deferreds are "current" for 2010 for simplicity
2010 Tax Provision	C		-	-	-		-	-	-	-	-			-		-		-	-		-	-	-	F		-
Balance at 12/31/2010		115,000	-	-	115,000	F	-	-	-	-	-		114,358	-	(114,358)	-	F
2011 Estimated Taxes Paid		95,000	40,000	-	135,000																				(135,000)	-
2010 Prov-Return True-up		-	-	-	-		-	-	-	-	-		-	-	-	-		-	-		-	-	-			-
													assume all deferreds are "current" for 2011 for simplicity
2011 Tax Provision	C			-	-		-	-	-	-	-			-	-	-		-	-		-	-	-	F		-
Balance at 12/31/2011		210,000	40,000	-	250,000	F	-	-	-	-	-		114,358	-	(114,358)	-	F
2012 Estimated Taxes Paid		110,000	30,000	-	140,000																				(140,000)	-
Tax Paid w/ 2011 TR		-	-	-	-																				-	-
2011 Prov-Return True-up	P			-	-		-	-	-	-	-			-	-	-		-	-		-	-	-			-
2012 Tax Provision - Delta only	C			-	-						-			-	-	-			-		-	-	-			-
Reclass - Current / Non-Current		-	-	-	-		-	-	-	-	-		-		-	-		-	-		-	-	-			-
																D
Balance at 12/31/2012 - Delta Only		320,000	70,000	-	390,000	F	-	-	-	-	-		114,358	-	(114,358)	-	F			for CY year	-	-	-	F
2012 Tax Provision - Foxtrot only	FC	-	-		-		-	-	-	-	-		-		-	-		-					-			-
Balance at 12/31/2012 - Consolidated		320,000	70,000	-	390,000	FS	-	-	-	-	-	FS	114,358	-	(114,358)	-	FS			for CY year	-	-	-	FS
"Proof" of ending Taxes Payable Balance
Taxes paid towards 2012		320,000	70,000	-	390,000
2012 Tax Provision		-	-	-	-
Estimated Balance due w/ 12/31/2012 TRs		320,000	70,000	-	390,000

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R - Rate Reconciliation

DELTA Corporation & Subsidiary						input
Rate Reconciliation		Final Exam Question #5				link
		Task - Complete the Rate Reconciliation for each of the years 2010 to 2012.
Dr (Cr)
				2009						2010					2011						2012
		Gross amt		Tax Effected $	Tax Effected %			Gross amt		Tax Effected $	Tax Effected %		Gross amt		Tax Effected $	Tax Effected %			Gross amt		Tax Effected $	Tax Effected %
				35%						35%					35%						35%
Tax Expense / (Benefit) at Statutory Rate	C	(301,000)		(105,350)	35.00%		C	250,000		87,500	35.00%	C	1,162,000		406,700	35.00%		C / FC	3,190,000		1,116,500	35.00%
State Tax (gross - including rate adj.) b4 True-up			C	-					C	-				C						C
State Tax (fed benefit)				-						-					-						-
State Tax (net of fed benefit)				-	0.00%					-	0.00%				-	0.00%	FS				-	0.00%	FS
Foreign Rate Differential				-	0.00%					-	0.00%				-	0.00%				FC		0.00%	FS
Permanent Differences (domestic only) -
Non deductible penalties	C	-		-	0.00%		C			-	0.00%	C			-	0.00%		C			-	0.00%
Meals & entertainment	C	10,000		3,500	-1.16%		C			-	0.00%	C			-	0.00%		C			-	0.00%
Stock Comp Expense (ISO)	C	833		292	-0.10%		C			-	0.00%	C			-	0.00%	FS	C			-	0.00%	FS
Other - Perm #1	C	-		-	0.00%		C			-	0.00%	C			-	0.00%		C			-	0.00%
Other - Perm #2	C	-		-	0.00%		C			-	0.00%	C			-	0.00%		C			-	0.00%
R&E Tax Credit			C	(12,800)	4.25%				C		0.00%			F		0.00%				F		0.00%
Valuation Allowance Adj.			C	114,358	-37.99%				C		0.00%				-	0.00%					-	0.00%
Prior Year True-up (Fed & State)				-	0.00%					-	0.00%				-	0.00%	FS			P		0.00%	FS
FIN 48 Accrual (fed tax only, interest & penalties)				-	0.00%					-	0.00%				-	0.00%				C		0.00%
Total Tax Expense / (Benefit) / ETR			C	-	0.00%				C	87,500	35.00%			C	406,700	35.00%				C	1,116,500	35.00%

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FS - Financial Stmt Disclosure

DELTA Corporation & Subsidiary
Income Tax Footnote Disclosure			Final Exam Question #7
Year Ended December 31, 2012
		Task - Prepare the Financial Statement Disclosures for 2012 (with 2011 comparison)
		complete the below templates and add any add'l disclosures you deem necessary
The provision for income taxes consists of the following:
		Year Ended 12/31/11		Year Ended 12/31/12
Current:
	C
	C
		-	FC
Total Current		-		-
Deferred:
	C
	C
		-	FC
Total Deferred		-		-
Total		-		-
The components of earnings before income taxes, by taxing jurisdiction, were as follows for the years ended December 31:
		Year Ended 12/31/11		Year Ended 12/31/12
U.S.	C		C
Foreign		-	FC
Total		-		-
The provision for income taxes for the years ended December 31, 2011 and 2012 differ from the amount computed by applying the statutory federal corporate income tax rate of 35% to earnings before income taxes as a result of the following:
		Year Ended 12/31/11		Year Ended 12/31/12
Statutory Rate	R	35.00%		35.00%
State Income Taxes (net of fed benefit)	R
Foreign Tax Differential	R
Permanent Differences	R
Credits & Other, net	R
Effective Tax Rate		35.00%		35.00%
The tax effects of temporary differences for the years ended December 31 that give rise to significant portions of the deferred tax assets and deferred tax liabilities are provided below:
		Year Ended 12/31/11		Year Ended 12/31/12
Deferred Tax Assets:
	D
	D
Stock Compensation	D
Tax Credits	D
	D
Total		-		-
Valuation Allowance		-		-
Total Deferred Tax Assets (net of VA)		-		-
Deferred Tax Liabilities:
Property, Plant & Equipment	D
	D
	D
Total		-		-
Net Deferred Tax Assets		-		-
The net deferred income tax assets are recorded on the Balance Sheet at December 31 as follows:
		Year Ended 12/31/11		Year Ended 12/31/12
Current asset / (liability)	D
Noncurrent asset / (liability)	D
Total		-		-

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