Deciphering Financial Statements (Sara Lee Corporation) Sara Lee Corporation owns the following brands: Ball Park franks, Sara Lee bakery goods, Hillshire Farm, Jimmy Dean, Kiwi shoe care products, a

Deciphering Financial Statements (Sara Lee Corporation)

Sara Lee Corporation owns the following brands: Ball Park franks, Sara Lee bakery goods, Hillshire Farm, Jimmy Dean, Kiwi shoe care products, and many other products. The following information relates to the company’s deferred taxes.

Sara Lee Corporation and Subsidiaries Income Taxes

Current and deferred tax provisions (benefits) were (in millions):

2009 2008 2007

Current Deferred Current Deferred Current Deferred

U.S. $ 89 $(61) $310 $(247) $ 18 $(144)

Foreign 214 (22) 168 (32) 123 4

State 4 0 (10) 12 (4) (8)

$307 $(83) $468 $(267) $137 $(148)

Cash payments for income taxes from continuing operations were $273 in 2009. $459 in 2008, and $378 in 2007.

Based on this information, answer the following questions:

1. Provide the journal entry(ies) made by Sara Lee to record the 2009 income tax expense (net) of $224 million. Remember to allocat3e the expense and benefit between current and deferred.

2. Provide the journal entry made by Sara Lee to record the payment of income taxes during the year 2009.

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