RWP #4 – Income Taxes

This is your fourth Real World Assignment, and is relatively straight forward. This exercise will require that you go to the SEC website, find a specific company’s filings, and answer the following questions:

Instructions

Refer to the most recent 10-Ks (Year Ended in 2023) for Apple Inc. and Alphabet Inc.

NOTE: Some answers are numerical, fill-in the blanks. Please adjust all answers for the units, and include the ‘,’ separators (e.g., 11 million or 11,000 thousand should be entered as 11,000,000), if required.

Instructions for navigating the SEC website.https://www.sec.gov/

1 – The SEC uses a database called EDGAR to store company data (Electronic Data Gathering, Analysis, and Retrieval system). To use this database, click on “COMPANY FILINGS” on the upper right corner of the website (below the search box).

2 – Search initially by the company name “Apple Inc” and “Alphabet Inc”. Do not include the “.” in the search. Some companies may not use the “.” in their name, and you will not be able to find them (i.e., Apple Inc).

3 – If you search only by the first part of the name (“Apple” or “Alphabet”) you will get a number of different filings. You should double check the CIK (Central Index Key) before you pull the incorrect filing. The CIK for Apple is 0000320193. The CIK for Alphabet is 0001652044. You can also search by CIK, but since most people don’t know the CIK off hand, you should first attempt to use the name.

4 – The filing date and the year ended are not the same! The filing date will be 1-3 months after the year end.

Question 1.

Refer to Apple, Inc, “Consolidated Statements of Operations.”

For the year ended 2023, calculate the effective tax rate (Provision for Income Taxes / Income Before Provision for Income Taxes).

Enter your answer as a percentage, with one decimal place (you may ignore the % sign). For example, if your answer is 25%, enter 25.0 into the textbox.

Question 2.

Refer to Apple, Inc, “Notes to Consolidated Financial Statements.” (Note 7 – Income Taxes)

Under the header Deferred Tax Assets and Liabilities, you will find a table that lists the components of Apple’s DTAs and DTLs.

What was the “Total Deferred Tax Liabilities” balance for year-ended 2023?

Remember to adjust the amount presented for the units. If the column title has (in millions), then you need to add 000,000 to your answer.

e.g., Amount (In Millions) = 1

Your Answer = 1,000,000

NOTE: This may be presented as a negative number. Enter a positive number for your answer.

Question 3.

Refer to Apple, Inc, “Notes to Consolidated Financial Statements.” (Note 7 – Income Taxes)

Under the header Deferred Tax Assets and Liabilities, you will find a table that lists the components of Apple’s DTAs and DTLs.

What was the total Deferred Tax Asset balance for year-ended 2023 (do not include the Valuation Allowance adjustment)?

Remember to adjust the amount presented for the units. If the column title has (in millions), then you need to add 000,000 to your answer.

e.g., Amount (In Millions) = 1

Your Answer = 1,000,000

Question 4.

Refer to Apple, Inc, “Notes to Consolidated Financial Statements.” (Note 7 – Income Taxes)

Under the subheading Uncertain Tax Positions, Apple refers to the uncertainty of tax audit outcomes (within the paragraph, after the table). How much could the gross unrecognized tax benefit decrease by in the next 12 months (after year-end)?

Question 5.

Refer to Alphabet Inc, “Consolidated Statements of Income.”

For the year ended 2023, calculate the effective tax rate (Provision for Income Taxes / Income Before Income Taxes).

Enter your answer as a percentage, with one decimal place (you may ignore the % sign). For example, if your answer is 25%, enter 25.0 into the textbox.

Question 6.

Refer to Alphabet Inc, “Notes to Consolidated Financial Statements.” (Note 14 – Income Taxes)

Under the header Deferred Tax Assets and Liabilities, you will find a table that lists the components of Alphabet’s DTAs and DTLs

What was the total Deferred Tax Liability balance for year-ended 2023?

Remember to adjust the amount presented for the units. If the column title has (in millions), then you need to add 000,000 to your answer.

e.g., Amount (In Millions) = 1

Your Answer = 1,000,000

NOTE: This may be presented as a negative number. Enter a positive number for your answer.

Question 7.

Refer to Alphabet Inc, “Notes to Consolidated Financial Statements.” (Note 14 – Income Taxes)

Under the header Deferred Tax Assets and Liabilities, you will find a table that lists the components of Alphabet’s DTAs and DTLs

What was the total Deferred Tax Asset balance for year-ended 2023 (do not include the Valuation Allowance adjustment)?

Remember to adjust the amount presented for the units. If the column title has (in millions), then you need to add 000,000 to your answer.

e.g., Amount (In Millions) = 1

Your Answer = 1,000,000

Question 8.

Refer to Alphabet Inc, “Notes to Consolidated Financial Statements.” (Note 14 – Income Taxes)

Under the subheading “Uncertain Tax Positions,” how much did Alphabet accrue in interest and penalties in the provision for income taxes for year ended 2023? (The sentence starts with “As of December 31, 2022 and 2023…”)

Remember to adjust the amount presented for the units. If the column title has (in millions), then you need to add 000,000 to your answer.

e.g., Amount (In Millions) = 1

Your Answer = 1,000,000