Question
Listed below are ten independent situations. For each situation indicate (by letter) whether it will create a deferred tax asset (A), a deferred tax liability
Listed below are ten independent situations. For each situation indicate (by letter) whether it will create a deferred tax asset (A), a deferred tax liability (L), or neither (N). Situation _____ 1. Advance payments on insurance deductible when paid. _____ 2. Estimated warranty costs, tax deductible when paid. _____ 3. Rent revenue collected in advance; cash basis for tax purposes. _____ 4. Interest received from investments in municipal bonds. _____ 5. Prepaid expenses tax deductible when paid. _____ 6. Operating loss carryforward. _____ 7. Operating loss carryback. _____ 8. Straight-line depreciation for financial reporting; MACRS for tax purposes. _____ 9. Organization costs expensed when incurred, tax deductible over 15 years. _____10. Life insurance proceeds received upon the death of the company president.
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