In the current year you are calculating a diversified companys deferred taxes. Based on an analysis of

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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:
______1. Percentage depletion deducted for taxes in excess of cost depletion for financial reporting
______2. Warranty costs to be deducted for taxes that were deducted as warranty expense for financial reporting
______3. Gross profit to be recognized for taxes under the completed-contract method that was recognized for financial reporting under the percentage-of-completion method
______4. Officers’ life insurance premium expense deducted for financial reporting
______5. Rent revenue to be recognized for financial reporting that was reported for taxes when collected in advance
______6. Loss from write-down of inventory that was recognized for financial reporting but that will be deducted for taxes when the inventory is sold
______7. Interest revenue on municipal bonds recognized for financial reporting
______8. Loss due to contingent liability that was deducted for financial reporting that will be deducted for taxes when the liability is actually paid
______9. Gross profit to be recognized under installment method for tax purposes that was recognized on accrual basis for financial reporting
______10. Depreciation to be recognized for financial reporting in excess of MACRS depreciation to be deducted for tax purposes
______11. 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
Required
For each difference, indicate whether it is a temporary difference (T) or a permanent difference (P) by placing the appropriate letter on the line provided. If the difference is a temporary difference, also indicate for the current year whether it will result in a future taxable amount (T) or a future deductible amount (D).

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Related Book For  answer-question

Intermediate Accounting

ISBN: 978-0324300987

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

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