50.1K

Verified Solution

Link Copied!

please explain this in proper english. i can't undestand the answers that is up for this question on here

Financial Statement Analysis Case Homestake Mining Company Homestake Mining Company is a 120-year-old international gold mining company with substantial gold mining operations and exploration in the United States, Canada, and Australia. At year-end, Homestake reported the following items related to income taxes (thousands of dollars). Total current taxes Total deferred taxes Total income and mining taxes (the provision for taxes per its income statement) $ 26,349 (39,436) $(13,087 Deferred tax liabilities Deferred tax assets, net of valuation allowance of $207,175 Net deferred tax liability $303,050 95,275 $207,775 Note 6 The classification of deferred tax assets and liabilities is based on the related asset or liability creating the deferred tax. Deferred taxes not related to a specific asset or liability are classified based on the estimated period of reversal. Tax loss carryforwards (U.S., Canada, Australia, and Chile) $71,151 Tax credit carryforwards $12,007 Instructions (a) What is the significance of Homestake's disclosure of "Current taxes" of $26,349 and "Deferred taxes" of $(39,436)? (b) Explain the concept behind Homestake's disclosure of gross deferred tax liabilities (future taxable amounts) and gross deferred tax assets (future deductible amounts). (d) Homestake reported tax loss carryforwards of $71,151 and tax credit carryforwards of $12,007. How do the carry and carryforward provisions affect the reporting of deferred tax assets and deferred tax liabilities

Answer & Explanation Solved by verified expert

See Answer