Case 16 - Part 2 4. T AXES BASED ON INCOME The provision...

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Unformatted text preview: Part 2 4. T AXES BASED ON INCOME The provision for taxes based on income consists of: 2006 2005 2004 Federal Current $ 652 $ 609 $ 96 Deferred (52) (79) 258 600 530 354 State and local Current 55 42 25 Deferred (22) (5) 11 33 37 36 Total $ 633 $ 567 $ 390 A reconciliation of the statutory federal rate and the effective rate follows: 2006 2005 2004 Statutory rate 35. 0% 35. 0% 35.0% State income taxes, net of federal tax benefit 1.9% 1.6% 2.6% Non-deductible goodwill 101. 7% Deferred tax adjustment (1.2 ) % Other changes, net 0.5% 0.6% (2.9)% 36. 2% 37. 2% 136. 4% During the reconciliation of the Companys deferred tax balances, after the filing of annual federal and state tax returns, the Company identified adjustments to be made in the prior years deferred tax reconciliation. These deferred tax balances were corrected in the Companys Consolidated Financial Statements for the year ended Febr uary 3, 2007, which resulted in a reduction of the Companys 2006 provision for income tax expense of approximately $21. The Company does not believe these adjustments are material to its Consolidated Financial Statements for the year ended February 3, 2007, or to any prior years Consolidated Financial Statements. As a result, the Company has not restated any prior year amounts. The tax effects of significant temporary differences that comprise tax balances were as follows: 2006 2005 Current deferred tax assets: Net operating loss carryforwards $ 17 $ 18 Compensation related costs 32 Other 4 42 Total current deferred tax assets 53 60 Current deferred tax liabilities: Compensation related costs (2) Insurance related costs (109) (107) Inventory related costs (212) (168) Total current deferred tax liabilities...
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Case 16 - Part 2 4. T AXES BASED ON INCOME The provision...

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