Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.

For each item below, indicate whether it involves:

1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset.

2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax

liability.

3. A permanent difference.

Use the appropriate number to indicate your answer for each.

Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will resuit in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability 3. A permanent difference. Use the appropriate number to indicate your answer for each. a. The MACRS depreciation system is used for tax purposes, and the straight-line depreciation method is used for finaneial reporting purposes for some plant assets b. A landiord collects some rents in advance. Rents received are taxable in the period when they are recelved. d. Costs of guarantees and warranties are estimated and acerued for financial reporting purposes. e. Intaliment sales of investments are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes. 1. For some assets, straight-line depreciation is used for both financiai reporting purposes and tax purposes, but the assets' lives are shorter for tax purposes. interest is recelved on an investment in tax-exempt municipal obligations. Proceeds are recelved from a life insurance company because of the death of a key officer. (The company carries a policy on key otficers) The tax return reports a deduetion for 80% of the dividends received from US. corporations. The cost method is used in accounting for the related investments for financial reporting purposes. Estimated losses on pending lawsuits and elaims are accrued for books. These losses are tax-deductible in the period(s) when the related liabilities are settied. Expenses on stock options are accrued foc financial reporting purposes Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will resuit in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability 3. A permanent difference. Use the appropriate number to indicate your answer for each. a. The MACRS depreciation system is used for tax purposes, and the straight-line depreciation method is used for finaneial reporting purposes for some plant assets b. A landiord collects some rents in advance. Rents received are taxable in the period when they are recelved. d. Costs of guarantees and warranties are estimated and acerued for financial reporting purposes. e. Intaliment sales of investments are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes. 1. For some assets, straight-line depreciation is used for both financiai reporting purposes and tax purposes, but the assets' lives are shorter for tax purposes. interest is recelved on an investment in tax-exempt municipal obligations. Proceeds are recelved from a life insurance company because of the death of a key officer. (The company carries a policy on key otficers) The tax return reports a deduetion for 80% of the dividends received from US. corporations. The cost method is used in accounting for the related investments for financial reporting purposes. Estimated losses on pending lawsuits and elaims are accrued for books. These losses are tax-deductible in the period(s) when the related liabilities are settied. Expenses on stock options are accrued foc financial reporting purposes