Listed below are a number of items that are required to adjust net income before income tax to taxable income.

Item

Add or Subtract

a. Golf club dues, $20,000

_____________

b. Depreciation expense, $60,000

_____________

c. Development costs incurred during year; capitalized for accounting purposes, $100,000

_____________

d. Warranty costs accrued during year, $30,000

_____________

e. Interest and penalty for late payment payroll taxes, $25,000

_____________

f. CCA, $180,000

_____________

g. Amortization of capitalized development costs, $10,000

_____________

h. Costs incurred during year for warranty work completed, $22,000

_____________

Required:

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1. For each item, indicate if it will be added or subtracted from net income before income taxes.
3. For each item, indicate if it is a permanent difference or a temporary difference.