Below is attached annual report along with the questions.
Write a two page report along with the solution.
Income Tax Case Study:
Present a case study relating to the impact of income taxes in Financial Statement Presentation.
Analyze the case study and answer questions relating to:
• Tax depreciation methods,
• permanent differences,
• temporary differences,
• deferred tax assets,
• deferred tax liabilities,
• income tax expense and the presentation of the income tax account on the financial statements.
Additionally, Examine the IFRS standards on income tax accounting, and compare and contrast its position with that of U.S. GAAP.
For the purpose of assurance of learning, the student will receive two scores based on:
(1) A2S1: the quality of the analysis of IFRS income tax accounting rules compared and contrasted to U.S. GAAP (MBA-INTERNATIONAL); and
(2) A2S2: the ability to use tax laws, and the accounting for income taxes for financial statement purposes, to result in correct responses to the case study questions (MBA-ACCT).
Gildan Activewear Inc.
Gildan Activewear Inc. is a Canadian company that manufactures and sells active wear, socks, and underwear. Manufacturing is primarily done in Honduras and Dominican Republic and sales are made worldwide.
Instructions
Through SEDAR (www.sedar.com) or Gildan's website (www.gildan.com), obtain a copy of the company's financial statements for its year ended September 30, 2012 (2012 year end), and answer the following questions.
(a) Review the Consolidated Statements of Earnings and Comprehensive Income for 2012 and 2011. What was the income tax expense for each year?
How much does the company show as income taxes payable on the consolidated statement of financial position for the fiscal year ends 2012 and 2011? What was paid for income taxes in 2012 and 2011, and where did you find this information? What was reported regarding cash flows of current income taxes in 2012 and 2011, and where did you find this information?
(b) What was the company's effective tax rate for 2012? For 2011? What was the statutory rate in each of these years? What caused the differences? Be specific about whether the effective rate was increased or decreased as a result of each cause that you identify. Note 20 will aid you.
(c) What are the losses that the company has available to carry forward? When do these losses expire? How has the company accounted for these losses? Note 20 will aid you.
Attachment:- Gildan-annual-report.rar