On 1 January 20X2, Company A buys machinery for 90,000 and
depreciates it using a diminishing balance method at 30% a year.
For tax purposes, the machinery is depreciated at 25% per annum on
a straight-line basis. The tax rate is 30%. It is not probable that
future taxable profit will allow any deferred tax assets to be
recovered. What should the Company record for income tax purposes,
if anything, as it relates to the machinery as at 31 December
20X2?
Deferred tax liability of 1,350
Deferred tax asset of 4,500
Deferred tax asset of 1,350
Deferred tax asset of 0