Question - Cranberry Chemical had accrued pretax restructuring charges of $960 million on December 31, 2013. In 2014, Cranberry recorded pretax restructuring charges of $1,378 million. The charges consisted of asset write-downs of $908 million, other costs associated with exit of $132 million, and employee severance costs of $338 million. In 2014, the company paid $144 million cash to settle restructuring charges and wrote off the assets year (2014).
a. On December 31, 2014, what is in the dollar amount in the restructuring accrual account?
b. What was the amount of the restructuring expense on Cranberry Chemical's income statement for 2014?
c. For tax purposes, restructuring charges can only be deducted when they are paid. Does this restructuring charge create a deferred tax asset or liability? Explain.