1. Interest on investments in tax-exempt securities amounts to $22,000.
2. Fines and violations of the law amount to $3,000.
3. An excess of accrued warranty expense over amounts paid to satisfy warranties during the year is $18,000.
4. An excess of installment sales revenue over the cash received is $31,000 (accrual basis used for financial reporting and cash basis used for tax return).
5. Life insurance premium on key officers is $6,000.
6. Depreciation for books is $70,000 whereas depreciation using an accelerated method for tax purposes is $90,000.
7. Losses accrued for accounting purposes for litigation contingencies amounts to $16,000.

Are these temporary or permanent differences? and why? A little confused on the why.

Answer rating: 100% (QA)

iPermanent since no tax will be charged Taxexempt security is one in which the revenue generated is ... View the full answer