accounting-ii-real-world-case-16-3-disclosure-issues-balance-sheet-classifications-walmart

Real Word Case 16-5 International

Disclosure issues, balance sheet classifications, Walmart.

The income tax disclosure not accompanying the January 31,2017, financial statements of Walmart is reproduced below.

Current201720162015

U.S. Federal$3,454$5,562$6,165

U.S. State and local tax459622810

International1,5101,4001,529

Total Current tax provision5,459 7,5848,504

Deferred:

US Federal$1,054(704)(387)

US State and local tax51(106)(55)

International (306)(216)(77)

Total Deferred Tax expense (benefit)745(1,026)(519)

Total Provision for Income Taxes$6,204$6,558$7,985

20172016

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Deferred Tax Assets:

Loss & Tax Credit carryforwards$3,633$3,313

Accrued Liabilities3,4373,763

Share- based compensation309192

Other1,4741,390

Total deferred Tax Assets8,8538,658

Valuation Allowances(1,494)(1,456)

Deferred Tax Assets, Net of Val. Allowance $7,359$7,202

Deferred Tax Liabilities:

Property and equipment$6,435$5813

Inventories1,808 1,790

Other1,884 1,452

Total deferred Tax Liabilities10,127 9,055

Net Deferred Tax Liabilities$2,768$1,853

Required:

• Focusing on only the first part of Note 9, relating current, deferred, and total provision for income taxes, prepare a summary journey entry that records Walmart’s 2017 tax expense associated with income from continuing operations.
• Calculate the actual change in Walmart’s net deferred tax liability for fiscal 2017. Does that change reconcile with the change indicated in your summary journal entry? What besides continuing operations might affect deferred taxes?

Please make a single entry to “Deferred tax liability (net)” for the total effect on deferred tax assets, deferred tax liabilities and the valuation allowance.