Assume Maple Corp. has just completed the third year of its existence (year 3). The table below indicates Maples ending book inventory for each year and the additional 263A costs it was required to include in its ending inventory. Maple immediately expensed these costs for book purposes. In year 2, Maple sold all of its year 1 ending inventory, and in year 3 it sold all of its year 2 ending inventory.

	Year 1			Year 2			Year 3
Ending book inventory	$	2,600,000		$	2,920,000		$	2,166,000
Additional 263A costs		43,000			88,750			40,750
Ending tax inventory	$	2,643,000		$	3,008,750		$	2,206,750

a-1. What book-tax difference associated with its inventory did Maple report in year 1?

a-2. Was the difference favorable or unfavorable?

Favorable

Unfavorable

Not applicablea-3. Was it permanent or temporary?

	Temporary
	Permanent
	Not applicable

b-1. What book-tax difference associated with its inventory did Maple report in year 2? b-2. Was the difference favorable or unfavorable?

	Favorable
	Unfavorable
	Not applicable

b-3. Was it permanent or temporary?

	Temporary
	Permanent
	Not applicable

c-1. What book-tax difference associated with its inventory did Maple report in year 3? c-2. Was the difference favorable or unfavorable?

	Favorable
	Unfavorable
	Not applicable

c-3. Was it permanent or temporary?

	Temporary
	Permanent
	Not applicable