Cullumber Co., organized on January 2, 2018, had pretax accounting income of $890000 and taxable income of $3470000 for the year ended December 31, 2018. The only temporary difference is accrued product warranty costs which are expected to be paid as follows:

2019

$700000

2020

325000

2021

3700002022

840000

The enacted income tax rates are 35% for 2018, 30% for 2019 through 2021, and 25% for 2022. If Cullumber expects taxable income in future years, the deferred tax asset in Cullumber's December 31, 2018 balance sheet should be

$903000.

$488250.

$628500.

$418500