The Following Information Pertains to Questions

question 8

Multiple Choice

The following information pertains to questions
ABC purchased specialized machinery on January 1,2010 for $2,500.Due to certain restrictions,only 40% of the acquisition cost of the asset is tax deductible.ABC pays tax at a rate of 20%.
-What is the amount of the Deferred Tax Asset or Liability arising from the purchase of this machinery?

• A)a Deferred Tax Asset of $375
• B)a Deferred Tax Asset of $300
• C)a Deferred Tax Liability of $375
• D)a Deferred Tax Liability of $300