a)Companies spend a considerable amount of time and effort to minimize their income tax payments. And with good reason, as income taxes is one of the major costs of doing business for most companies. Yet, at the same time, companies must present financial information to the investment community that provides a clear picture of present and potential tax obligations and tax benefits. International Accounting Standards (IAS 12) outlines the accounting for both the current tax consequences of transactions and events and the future tax consequences of the future recovery or settlement of the carrying amount of an entity's assets and liabilities. It further discusses the Permanent and temporary differences for tax purposes. Explain what deferred tax is and differentiate between Permanent and temporary differences for deferred tax purposes. (6 marks) b) Listed below are items that are treated differently for accounting purposes than they are for tax purposes. Indicate whether the items are permanent differences or temporary differences. For temporary differences, indicate whether they will create deferred tax assets or deferred tax liabilities.( 7 marks) 1. Advance rental receipts. 2. Fine for polluting. 3. Estimated future warranty costs. 4. Expenses incurred in obtaining tax-exempt income. 5. Litigation accruals. 6. Excess tax depreciation over accounting depreciation.