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 governmental bonds.

5.Prepaid expenses, tax deductible when paid.

6.Net operating loss carryforward.

7.Net 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.