What is the amount of the Deferred Tax Asset or Liability on December 31, 2017?
SNZ Inc. purchased machinery and equipment in the amount of $30,000 on January 1, 2016. SNZ plans to depreciate the asset straight-line over 20 years with no salvage value. For tax purposes these assets are to be depreciated using a capital cost allowance rate of 20%. The half-year rule applies. SNZ pays tax at a rate of 25%.
A) a Deferred Tax Liability of $375
B) a Deferred Tax Liability of $1,350
C) a Deferred Tax Asset of $1,350
D) a Deferred Tax Asset of $1,675
B) a Deferred Tax Liability of $1,350
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