Question

79. Access the 2018 form 10-K for Facebook, Inc, and answer the following questions.

Required:

a) Using information from the company's Income Statement and Income Taxes footnote, what was the company's effective tax rate for 2018? 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 Tax 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 income taxes payable related to its unrecognized tax benefits on the the balance sheet?

g) How does the company treat interest and penalties related to its unrecognized tax benefit?

Answer 1

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proovision for income tax Hence (G) accounting cash far sale for the year 2018 g 117.12718 / 3887) 1 22690 (O. 1712 X100] [ 17. 127 In the note neember 15 of audit information about Segmente & geogoraphical area. major jurisdiction ag USA & Ireland All income from freign &ubs easy Should be earmed by 1478. Subsidary. Income tar sate in Ireland il 12.50% & in USA it 98 35% low an Ireland " Tax rate is compare to USA Hence Income earned from USA cs Scanned Scanned with CamScarlos lower than from Ireland.

@ Stock based compensation item o Creates deferred tax assets in Company Company has to consideratem relate to tempory difference Created. due to any transactions like fax rates etc Here al per ASC 718. stock balod compensation created tempoy difference beturen books. of accounts & Income tan. Becaule company accouel stock Based compensation But company cannot dedect the Expenses for too peorposee unitel Emploupe ea on the right to receve stock. Scanned with Camaste