The tax effects of temporary differences that give rise to deferred tax assets and liabilities are as follows ($ thousands):
|
2007 |
2006 |
||
|
Deferred tax assets: |
|||
|
Accrued expense |
$8,613 |
$7,927 |
|
|
Tax credit and net operating loss carry forwards |
2,288 |
2,554 |
|
|
LIFO and inventory reserves |
5,286 |
4,327 |
|
|
Other |
2,664 |
2,109 |
|
|
Deferred tax assets: |
18,851 |
16,917 |
|
|
Valuation allowance |
(1,245) |
(1,360) |
|
|
Net deferred tax assets |
$17,606 |
$15.557 |
|
|
Deferred tax liabilities: |
|||
|
Depreciation Ana Amortization |
(27,338) |
(29,313) |
|
|
Compensation and retirement plans |
(3,831) |
(8,963) |
|
|
Other |
(1,470) |
(764) |
|
|
Deferred tax liabilities |
(32,639) |
(39,040) |
|
|
Net Deferred tax liability |
($15,033) |
($23,483) |
|
A reduction in the statutory tax rate would most likely benefit the company’s
a. income statement and balance sheet.
b. income statement but not the balance sheet.
c. balance sheet but not the income statement.