Question

397 Analyzing and Interpreting Income Tax Disclosures The income tax footnote to the 2018 financial statements for Boeing follows. The components of income before tax were: Years ended December 31 ($ millions) 2018 2017 2016 U.S. $11,166 $9,660 $5,386 Non-U.S. 438 447 Total $11,604 $10,107 $5,783 Income tax expense/(benefit) consisted of the following: Years ended December 31 ($ millions) 2018 2017 2016 Current tax expense U.S. federal $1,873 $1,276 $1,193 Non-U.S. $169 $149 $133 U.S. State 15 Total current $2,139 $1,448 $1,341 Deferred tax expense U.S. federal $(996) $204 $(544) Non-U.S. $(4) $3 $(4) U.S. State (6) (44) Total deferred $(995) $201 $(592) 97 23 5 a. What is the amount of income tax expense reported by Boeing each year? Year ($ millions) 2018 $ 0 2017 $ 2016 $ 0 0 b. What percentage of total tax expense is currently payable for each year? Round percentage to one decimal place (example: 0.7345 = 73.5%). Year 2018 096 2017 096 2016 096

Answer 1

d) Current tax expense for U.S. operations = Current tax expense + Deferred tax exp. of U.S. federal and U.S. state Current tax expense for non-U.S. operations = Current tax expense + Deferred tax exp. of non-U.S. U.S. operations Non U.S. operations Year Income tax expense Income before tax Effective tax rate Income tax expense Income before tax Effective tax rate 2018 979 11,166 8.8% 165 2017 1,497 9,660 15.5% 152 438 37.7% 2016 620 5,386 11.5% 129 447 34.0% 397 32.5% e. Cash tax expense for U.S. operations = Current tax expense of U.S. federal + Current tax expense of U.S. state U.S. operations Year Current tax expense Income before tax Cash tax rate 2018 17.6% 2017 1,970 1,299 1,208 11,166 9,660 5,386 13.4% 2016 22.4% CS Scanned with CamScanner