Darwin, an Athletic Shoe Company, Reports the Following Information About

question 72

Short Answer

Darwin, an athletic shoe company, reports the following information about its income taxes for three recent years (amounts in millions):
$\begin{array}{lrrr}\text { Components of Income Tax Expense }&2015&2014&2013\\\text { Currently Payable } & \$ 775.6 & \$ 622.8 & \$ 495.4 \\\text { Deferred } & (26.0) & 25.4 & 9.0\\\text { Total Income Tax Expense }&\$749.6&\$648.2&\$504.4\end{array}$
a. Give the journal entries to record income tax expense for 2013, 2014, and 2015.
b. Describe the likely reasons for the pattern of taxes currently payable and deferred for each year.Assume that the deferred taxes relate primarily to retirement benefits.The effective tax rate was relatively stable for the three years.

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Definitions:

Volley Principle

A theory explaining how auditory neurons can produce the perception of sound frequencies higher than their individual firing rates through coordinated action.

Low Frequencies

Refers to sound waves with a frequency below about 200 Hz, often associated with bass sounds in music and acoustics.

Optic Disc

The optic disc is the point on the retina where the optic nerve fibers exit the eye, often referred to as the blind spot since it lacks photoreceptor cells.

Somatosensory Senses

The body's sensations, including touch, temperature, pain, and proprioception, allowing us to perceive our environment and body position.