During its first year of operations a company recorded accrued expenses totaling $250,000 for book purposes. For tax purposes, $100,000 of the expenses are deductible during the first year of operations and $150,000 are deductible during the second year of operations. The income tax rate for both years is 45%. The balance sheet at the end of the first year of operations will report a deferred tax:
A. asset of $67,500.
B. liability of $45,000.
C. asset of $100,00.
D. liability of $67,500.
Answer: A
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