Question

Fischer, Inc. reports total tax expense on its income statement for year ended December 31, 2010 of $80,884 and cash paid for taxes of $77,546.
The tax footnote in the company's 10-K filing, reports the following deferred tax information.
Deferred tax assets and liabilities consisted of the following (in thousands):

December 31 ($ thousands)	2010	2009
Deferred tax assets
State tax credits, net of federal tax impact	$ 3,500	$ --
Tax basis inventory adjustment	6,104	3,748
Inventory obsolescence reserves	4,528	5,600
Allowance for doubtful accounts and other reserves	17,992	14,084
Foreign net operating loss carryforward	21,834	18,952
Stock-based compensation	17,580	10,900
Intangible asset	774	2,136
Deferred rent	5,950	3,456
Deferred compensation	2,898	2,210
Other	5,418	6,302
Total deferred tax assets	86,548	67,388
Less: valuation allowance	(3,530)	--
Total net deferred tax assets	83,018	67,388
Deferred tax liabilities
Prepaid expenses	(3,730)	(2,266)
Property, plant and equipment	(6,208)	(11,566)
Total deferred tax liabilities	(9,938)	(13,832)
Total deferred tax assets, net	$ 73,080	$ 53,556

Use the financial statement effects template to record Fischer's income tax expense for the current fiscal year along with the changes in both deferred tax assets and liabilities. Assume that income taxes payable increased by $22,862 thousand.   

Record tax expense, part cash and part deferred on the balance sheet below:

Cash Asset:

+Non Cash Asset:

=Liabilities:

+Contributed Capital:

+Earned Capital :

Answer 1

The following are causes of changes in the Deferred tax and Liabilities during both periods
Fischer Deferred tax assets increased by ($83018-$67388) ie $15630.The value of the most deferred tax assets
except inventory obsolecene reserves and other increased during the year.The biggest increase in
deferred tax assets was contributed by stock based compensation ($17580-$10900)								$6,680
Fischers Deferred tax liabilities decreased by ($13832-$9938) ie $3894 .While the deferred tax liability created
by prepaid expenses increased by ($3730-$2266)ie $1464 the deferred tax liability resulting from property
plant and equipment decreased by ($11566-$6208) ie $5358 causing a decline in the overall value of total
deferred tax liability
The completed table is given below
			Balance Sheet
Transaction	Cash Asset	+	Non Cash Asset		=	Liabilities	+	Contributed Capital	+	Earned Capital
Record tax expense	-77546		15630			3894		0		-80884
part cash and			as calculated			balance				Given in the question
part deferred						amount
						towards
						tax payable
						as calculated