A sales tax is shared 50-50 between the county and the state. Businesses pay the county the full amount of the tax, and the county distributes half of the tax to the state. The county reports activities regarding the state's share of the sales tax in an agency fund. During 2016, the county collects \($2,750,000\) in sales taxes that belong to the state, and distributes \($2,500,000\) to the state. How are these activities reported by the county's agency fund?

a. Revenues of \($2,750,000\) and expenditures of \($2,500,000\)

b. Net liability decrease of \($250,000\)

c. Liability increase of \($2,750,000\) and expenditures of \($2,500,000\)

d. Net liability increase of \($250,000\)