Libby_7e_MBA_Companion_Solutions

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Unformatted text preview: fed eral benefit Dom estic p rod u ction activity d ed u ction Other, includ ing tax reserves and related interest 2008 36.1% 37.2% The American Jobs Creation Act of 2004 m ad e a nu m ber of changes to the incom e tax law s inclu ding the creation of a d ed u ction for qu alifying d om estic p rod u ction activities. The d ed u ction equ als three p ercent of qualifying net incom e for fiscal 2007, six percent for fiscal 2008 throu gh 2010, and nine percent for fiscal 2011 and thereafter. Ou r tax p rovisions for fiscal years 2009, 2008, and 2007 reflect benefits of $100 m illion, $97 m illion and $41 m illion, resp ectively, resulting from this d ed u ction. The Comp any ad op ted new accounting guid ance for incom e taxes at the beginning of fiscal year 2008. See Note 2 for the im p act of ad opting this gu idance. A reconciliation of the beginning and end ing am ount of gross u nrecognized tax benefits, exclud ing the related accru al for interest, is as follow s: 2008 2009 Balance at the beginning of the year Increases for cu rrent year tax p ositions Increases for prior year tax p ositions Decreases in p rior year tax positions Settlem ents w ith taxing authorities $ Balance at the end of the year $ $ 655 630 99 221 (189) (106) 63 17 (7) (42) $ 686 655 The year end 2009 and 2008 balances includ e $367 m illion and $353 m illion, resp ectively, that if recognized , w ou ld redu ce ou r incom e tax exp ense and effective tax rate after giving effect to offsetting...
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This homework help was uploaded on 03/27/2014 for the course ACCOUNTING 151 taught by Professor Chinn during the Spring '12 term at Lehigh University .

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