You have been tasked with understanding income tax reporting at T-Mobile US, Inc. and comparing it to that of AT&T. Use the following information from T-Mobile to address the questions. NOTE 10: Income Tax Income tax expense is summarized as follows:
Effective Income Tax Rate Reconciliation The reconciliation between the U.S. federal statutory income tax rate and our effective income tax rate is as follows:
Required: a. What is T-Mobile’s effective tax rate each year? What is the difference between T-Mobile’s effective tax rate and the statutory rate? Detail the items making up the difference. b. Compare AT&T’s effective tax rate for 2016, 2015, and 2014 from Example 17.24 in the text with the rate for T-Mobile. c. Compute T-Mobile’s conservatism ratio for each year. Comment on any changes in the ratio over the years. Would you characterize T-Mobile as a conservative or aggressive tax reporter? d. Compare AT&T’s conservatism ratio from Example 17.24 in the text with the ratio for T-Mobile.