1. iScope Inc. paid S3,000 in interest on a loan used to purchase municipal bonds. What is the nature of the book-tax difference relating to this expense? U) Permanent, unfavorable. V) Temporary, unfavorable W) Permanent; favorable. X) Temporary; favorable 12. Corporation A receives a dividend from Corporation B. Corporation A includes the dividend in its gross income for tax and financial accounting purposes (no book-tax difference). If A has accounted for the dividend correctly (following the general rule), how much of B stock does A own? A) A owns more than 50 percent of the stock of B B) A owns less than 20 percent of the stock of B C) A owns at least 20 but not more than 50 percent of the stock of B D) Cannot be determined 13. Coop Inc. owns 40% of Chicken Inc., both Coop and Chicken are corporations. Chicken pays Coop a dividend of $10,000 in the current year. Chicken also reports financial accounting earnings of $20,000 for that year. Assume that Coop follows the general rule of accounting for investment in Chicken. What is the amount and nature of the book-tax difference to Coop associated with the dividend distribution (ignoring the dividends received deduction)? A) S10,000 favorable B) S2,000 favorable C) $2,000 unfavorable D) S10,000 unfavorable E) None of the choices are correct