SNZ Inc. purchased machinery and equipment in the amount of $30,000 on January 1, 2019. 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%.

What is the amount of the temporary difference between straight line depreciation and capital cost allowance on December 31, 2020?

Multiple Choice

• $1,500
• $1,800
• $3,600
• $5,400