Taylor Company began manufacturing operations on January 2, 2015.

During 2015 Taylor earned pre-tax book income of $150,000 and had taxable

income of $200,000.

Taylor had a temporary difference relating to accrued product warranty

costs that are expected to be paid as follows:

2016 $ 30,000

2017 $ 15,000

2018 $ 5,000

The enacted tax rates are 30% for 2015 and 2016; and 40% for 2017 and 2018. The deferred tax asset at the end of 2015 is?

$17,000.

$12,000.

$20,000.

$9,000.