Calculate the deferred tax asset at 31 December 20X1 based on the following:

$10,000 asset acquired 01 January 20X1

Asset has zero estimated salvage value

Useful life of five years for both GAAP and tax depreciation

GAAP depreciation straight-line method

Tax depreciation double declining balance method (i.e. 40% of the assets depreciable base is depreciated in year one)

Tax rate of 30%

Select one:

a. $2,000

b. $600

c. NA should be a deferred tax liability instead of a deferred tax asset

d. $300

e. $1,200