Interperiod Tax Allocation differences

3. Interest is received on an investment in tax-exempt municipal obligations.

A permanent difference

2. A landlord collects some rents in advance. Rents received are taxable in the period in which they are received.

A temporary difference resulting in a deferred tax asset

4. Costs of guarantees and warranties are estimated and accrued for financial reporting purposes.

A temporary difference resulting in a deferred tax asset.

5. The music group Rock Stars has sold tickets to its concerts in 35 cities that will occur next fiscal year.

A temporary difference resulting in a deferred tax asset.

1. For plant assets, the depreciation expense deducted for tax purposes is in excess of the depreciation expense used for financial reporting purposes.

A temporary difference resulting in a deferred tax liability

6. The utility bill monthly invoice date is the 15th of each month.

No difference

7. The corporation wins a lawsuit and receives a check for $1,000,000 to compensate it for damages.

No difference