DA$18-1$ Analyzing Visualizations of Deferred Tax Accounts

The Excel file associated with this exercise includes balance sheet tax account data for two years for fourteen large companies in the Consumer Discretionary segment. In this exercise, we analyze trends in the deferred tax allowance as a percentage of the gross deferred tax asset balance. An increase in the percentage means that management expects a larger portion of the deferred tax asset to not be realized.

Required

Save this Excel file DA$18-1$ found in myBusinessCourse.

Create a schedule in Excel showing each company's deferred tax allowance balance divided by the gross deferred tax asset balance.

Sort the balances for each year in the order from largest to smallest. Hint: Copy and Paste Special the calculations as Values before sorting in order to save your calculations after sorting.

Create a bar chart visualization showing a bar for $2019$ and $2020$ for each company. Hint: Highlight the data, click Insert, Bar.

List the companies in which the ratio did not increase from year $2019$ to $2020.$

List the company that visually showed the largest change in the ratio from $2019$ to $2020.$

Select the best answer below that is the most likely reason for the common trend in the ratios from $2019$ to $2020.$

a$.$ The increasing trend in the ratio was generally due to foreign legislative changes.

b$.$ The increasing trend in the ratio was generally due to changes in the accounting for leases.

c$.$ The increasing trend in the ratio was generally due to the uncertainties surrounding future earnings due to the COVID$-19$ pandemic.

d$.$ The decreasing trend in the ratio was generally due to domestic legislative changes.

Create a separate schedule in Excel with a column for each company's net deferred tax asset balance and a column for each company's deferred tax liability balance as of $2020.$

Create a stacked bar chart for each company's net deferred tax asset balance and deferred tax liability balance as of $2020.$ Hint: Select the Insert tab, Recommended charts, and choose the $100\%$ stacked bar chart.

Indicate which company has the highest percentage of net deferred tax assets to deferred tax liabilities.

Indicate which company has the lowest percentage of net deferred tax assets to deferred tax liabilities.

Indicate a factor that could have had a significant impact on the relation of net deferred tax assets to deferred tax liabilities described in part $11.$ Choose the best answer.

a$.$ Property and equipment balances were greater for financial reporting than for tax.

b$.$ Accruals for self$-$insurance benefits were greater for financial reporting than for tax.

c$.$ Inventory balances were less for financial reporting than for tax.

d$.$ Accrued and deferred compensation balances were greater for financial reporting than for tax.