Deciphering Financial Statements (Sara Lee Corporation)
Sara Lee Corporation owns the following brands: Ball Park franks, Sara Lee bakery goods, Kiwi shoe care products, Hanes and Hanes Her Way, L’eggs, and about a hundred other products. Information relating to the company’s deferred taxes is shown below.
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Sara Lee Corporation and Subsidiaries |
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Income Taxes |
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Current and deferred tax provisions (benefits) were: |
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2004 |
2003 |
2002 |
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Current |
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Deferred |
Current |
Deferred |
Current |
Deferred |
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United States |
$(164) |
$ 33 |
$154 |
$(149) |
$ 82 |
$(150) |
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Foreign |
296 |
97 |
111 |
133 |
150 |
85 |
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State |
11 |
(3) |
(12) |
26 |
22 |
(14) |
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$ 143 |
$127 |
$253 |
$ 10 |
$254 |
$ (79) |
Cash paid for income taxes was $184 million in 2004, $265 million in 2003, and $266 million in 2002. Based on this information, answer the following questions:
1. Provide the journal entry(ies) made by Sara Lee to record the 2004 income tax expense of $270 million. Remember to allocate the expense between current and deferred.
2. Provide the journal entry made by Sara Lee to record the payment of income taxes during the year.