Listed below are seven independent situations. For each situation indicate (by letter) whether it will create (A) a deferred tax asset, (L) a deferred tax liability, or (N) neither. Provide rational for your answer if you can.

ANSWER	SITUATION
	1. Research and development costs reported in the income statement but elected to be capitalized and amortized over five years for tax purposes.
	2. An operating loss carry-forward.
	3. Premiums paid on life insurance policies covering key corporate executives, if the corporation wants the life insurance proceeds to be non-taxable.
	4. Warranty expense that is tax deductible when paid.
	5. Interest earned on investments in municipal bonds.
	6. Current year charitable contributions not currently deductible due to tax limitations but which can be carried forward to future tax years.
	7. Prepaid expenses, tax deductible when paid.
	8. Organization costs reported in the income statement but amortized and deducted over five years for tax purposes.
	9. The nondeductible portion of travel and entertainment expenses
	10. Prepaid expenses, tax deductible when paid.