E 16-8 Identify future taxable amounts and future deductible amounts LO16-2, LO16-3 Listed
below are 10 causes of temporary differences. For each temporary difference, indicate (by letter)
whether it will create future deductible amounts (D) or future taxable amounts (T). Temporary
Difference 1. Accrual of loss contingency; tax deductible when paid. 2. Newspaper
subscriptions; taxable when cash is 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 poid. 5. Prepaid insurance; tax deductible when paid 6.
Unrealized loss reported in net income 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 vacation days not
yet taken; tax deductible when employee takes vacation in future.
In year 1 , Boise purchased 10,000 shares of treasury stock for $5 per share. In year 3, Boise
reissued 1,000 shares of treasury stock for $8 per share. The journa entry to record the
transaction in yeat 3 will include (Select all that apply.) debit to common stock for $2,000 credit
treasury stock for $8,000 credit to retained earnings for $3,000 credit treasury stock for $5.000.
credit to paid-in capital from treasury stock for $3.000..
E 16-8 Identify future taxable amounts and future deductible amounts .pdf
1. E 16-8 Identify future taxable amounts and future deductible amounts LO16-2, LO16-3 Listed
below are 10 causes of temporary differences. For each temporary difference, indicate (by letter)
whether it will create future deductible amounts (D) or future taxable amounts (T). Temporary
Difference 1. Accrual of loss contingency; tax deductible when paid. 2. Newspaper
subscriptions; taxable when cash is 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 poid. 5. Prepaid insurance; tax deductible when paid 6.
Unrealized loss reported in net income 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 vacation days not
yet taken; tax deductible when employee takes vacation in future.
In year 1 , Boise purchased 10,000 shares of treasury stock for $5 per share. In year 3, Boise
reissued 1,000 shares of treasury stock for $8 per share. The journa entry to record the
transaction in yeat 3 will include (Select all that apply.) debit to common stock for $2,000 credit
treasury stock for $8,000 credit to retained earnings for $3,000 credit treasury stock for $5.000.
credit to paid-in capital from treasury stock for $3.000.
