Chapter 16, Problem 16.9E

Identify future taxable amounts and future deductible amounts

• LO16–1, LO16–2

(This is a variation of E 16–6, modified to focus on the balance sheet accounts related to the deferred tax amounts.) Listed below are 10 causes of temporary differences. For each temporary difference indicate the balance sheet account for which the situation creates a temporary difference.

Temporary Difference

_______ 1. Accrual of loss contingency; tax-deductible when paid

_______ 2. Newspaper subscriptions; taxable when received, recognized for financial reporting when the performance obligation is satisfied

_______ 3. Prepaid rent; tax-deductible when paid

_______ 4. Accrued bond interest expense; tax-deductible when paid

_______ 5. Prepaid insurance; tax-deductible when paid

_______ 6. Unrealized loss from recording investments at fair value; tax-deductible when investments are sold

_______ 7. Warranty expense; estimated for financial reporting when products are sold; deducted for tax purposes when paid

_______ 8. Advance rent receipts on an operating lease as the lessor; taxable when received

_______ 9. Straight-line depreciation for financial reporting; accelerated depreciation for tax purposes

_______ 10. Accrued expense for employee postretirement benefits; tax-deductible when subsequent payments are made