The tax effects of temporary differences that give rise to deferred tax assets and liabilities are as follows ($ thousands):
|
2007 Don't use plagiarized sources. Get Your Custom Essay on
a reduction in the statutory tax rate would most likely benefit the company s 599862
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|
2006 |
|
|
Deferred tax assets: |
||
|
Accrued expenses |
$8,613 |
$7,927 |
|
Tax credit and net operating loss carry-forwards |
2,288 |
2,554 |
|
LIFO and inventory reserves |
5,286 |
4,327 |
|
Other |
2,664 |
2,109 |
|
Deferred tax assets |
18,851 |
16,917 |
|
Valuation allowance |
(1,245) |
(1,360) |
|
Net deferred tax assets |
$17,606 |
$15,557 |
|
Deferred tax liabilities: |
||
|
Depreciation and amortization |
$(27,338) |
$(29,313) |
|
Compensation and retirement plans |
(3,831) |
(8,963) |
|
Other |
(1,470) |
(764) |
|
Deferred tax liabilities |
(32,639) |
(39,040) |
|
Net deferred tax liability |
($15,033) |
($23,483) |
A reduction in the statutory tax rate would most likely benefit the company’s:
A. income statement and balance sheet.
B. income statement but not the balance sheet.
C. balance sheet but not the income statement.
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