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Listed below are ten separate situations. For each item indicate whether the difference is (1) temporary creating a deferred tax asset (DTA) or a deferred

Listed below are ten separate situations. For each item indicate whether the difference is (1) temporary creating a deferred tax asset (DTA) or a deferred tax liability (DTL) or (2) permanent by marking an X in the appropriate column.

ITEM

Temporary - DTA

Temporary - DTL

PERMANENT

Pension fund contributions are less than pension expense for the current year, resulting in a pension liability on the companys balance sheet.

Dividend revenue recognized for accounting while a portion is deductible for taxes (dividends received deduction)

Estimated warranty costs: accrual basis for accounting and cash basis for income tax

Fines expensed for accounting but not deductible for tax purposes

Straight-line depreciation for accounting and accelerated depreciation for income tax

Unrealized gain on investments - Income recognized for accounting, but gain recognized only on disposal of the asset for income tax

Rent revenue collected in advance: accrual basis for accounting, cash basis for income tax

Unrealized loss on investments - Income recognized for accounting, but loss recognized only on disposal of the asset for income tax

Probable and estimable litigation contingency: accrual basis for accounting and cash basis for income tax

Interest received on investments in municipal bonds is not taxable

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