ACCT 3313-A temporary difference that will result in future

JWCL543_ch19_01-08.qxdListed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.InstructionsFor each item below, indicate whether it involves:(1) A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset.(2) A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability.(3) A permanent difference.Use the appropriate number to indicate your answer for each.(a) ______ For some assets, straight-line depreciation is used for tax purposes while double-declining balance method is used for financial reporting purposes.(b) ______ Warranty expenses are accrued when the sale is made, but cannot be deducted until the work is actually performed.(c) ______ The company uses the percentage of complete method to record revenue on long-term con- tracts for financial reporting purposes, but the completed contract method is used for tax purposes.(d) ______ Accelerated depreciation for tax purposes, and the straight-line depreciation method is used for financial reporting purposes for some equipment.(e) ______ A landlord collects some rents in advance. Rents received are taxable in the period whenthey are received.(f) ______ Tax-exempt income.(g) ______ An SEC fine related to financial reporting irregularities.(h) ______ For financial reporting purposes, an estimated loss from a lawsuit is accrued.The tax re-turn will not report a deduction until an amount is paid.(i) ______ A liability for a guarantee is accrued for financial reporting purposes.(j) ______ Installment sales are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes.