After many years of success, Kaputnik Company recorded net operating losses for the years year 13 through year 16, totaling $250 million, resulting in the recording of large deferred tax assets based on the assumption of a rapid return to profitability. However, attempts by management to revamp its outmoded business model have so far failed. A radical final attempt to save the company will be implemented in year 18. It will entail selling off the vast majority of Kaputniks asset groups while maintaining a small but promising segment. The projected outlook for the near term is a modest net profit of $5 million over the next three years, beyond which it is impossible to determine if Kaputnik Company will even still be in existence. The enacted tax rate is 35% for all applicable tax years. No addition to the deferred tax asset balance will be recorded for year 17, during which Kaputnik recorded a $70 million net operating loss, nor has Kaputnik ever recorded a deferred tax asset valuation allowance. Given these facts, what amount should Kaputnik record as Valuation allowance deferred tax asset as part of its year 17 year-end adjusting entries?

Multiple Choice

$85,750,000

$86,450,000

$87,500,000

$101,150,000