Calvin Co. prepared the following reconciliation between book income and taxable income for the current year ended December 31, year 1.

Pretax accounting income $1,000,000 taxable income ( 600,000)Difference $ 400,000Book-tax differences: Interest on municipal income $ 100,000 Lower financial depreciation 300,000Total$ 400,000

Calvin's effective federal and state income tax rate for year 1 is 30%. The depreciation difference will reverse equally over the next three years at enacted tax rates as follows.

YearTax RateYear 2 30%Year 3 25%Year 4 25%

In Calvin's year 1 income statement, the deferred portion of its provision for income taxes should be:

a.

$100,000

b.

$90,000

c.

$80,000

d.

$120,000