Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences.

Situation	1		2
Taxable income	$40,000		$80,000
Amounts at year-end:
Future deductible amounts	5,000		10,000
Future taxable amounts	0		5,000
Balances at beginning of year:
Deferred tax asset	1,000		4,000
Deferred tax liability	0		1,000

The enacted tax rate is 25% for both situations. Determine the changein the deferred tax asset balance for the year.

Situation 1

Situation 2

a.$5,000$10,000

b.$250$1,500

c.$1,250$2,500

d.$0$0