Temporary and Permanent Differences In the current year, you are calculating a diversified company's deferred taxes. Based on an analysis of the company's current taxable income and pretax financial income, you have identified the following items that create differences between the two amounts and that may result in differences between the company's future taxable income and its future pretax financial income: Required: For each difference, indicate whether it is a temporary difference or a permanent difference by selecting the appropriate answer. If the difference is a temporary difference, also indicate for the current year whether it will result in a future taxable amount or a future deductible amount. Percentage depletion deducted for taxes in excess of cost depletion for financial reporting. Warranty costs to be deducted for taxes that were deducted as warranty expense for financial reporting. Gross profit to be recognized for taxes under the completed-contract method that was recognized for financial reporting under the percentage-of-completion method. Officers' life insurance premium expense deducted for financial reporting. Rent revenue to be recognized for financial reporting that was reported for taxes when collected in advance. Loss from writedown of inventory that was recognized for financial reporting but that will be deducted for taxes when the inventory is sold. Interest revenue on municipal bonds recognized for financial reporting. Loss due to contingent liability that was deducted for financial reporting that will be deducted for taxes when the liability is actually paid. Gross profit to be recognized under the cash-basis method for tax purposes that was recognized on an accrual basis for financial reporting. Depreciation to be recognized for financial reporting in excess of MACRS depreciation to be deducted for tax purposes. Investment income that has been recognized under the equity method for financial reporting that will be recognized as fully taxable for tax purposes when dividends are collected.