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).

_____ 1. Advance payments on an operating lease; tax 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. Bad debt expense; allowance method for accounting; direct write-off for tax.
_____ 9. Organization costs expensed when incurred, tax deductible over 15 years.
_____ 10. Life insurance proceeds received upon the death of the company president.

  • CreatedJuly 05, 2013
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