Question: Excerpts from Starbucks Corporation's tax note from the company's Form 10-K for the year ended September 30, 2012, follow.
Required: 1. Provide a journal entry to record the aggregate income tax expense for the year ended September 30, 2012.
2. What amount of Starbucks' income tax expense for the year ended September 30, 2012, was deferred? Did this deferral result in an increase in deferred tax liabilities or a decrease in deferred tax assets?
3. Estimate Starbucks' earnings before taxes in the year ended September 30, 2012.
4. What tax policy or operating decision accounts for the majority of the divergence between Starbucks' statutory tax rate and effective tax rate?
5. Estimate the amount by which Starbucks' tax provision was lower in the year ended September 30, 2012, as a result of the domestic production activity deduction.