For calendar 2020, Melvin Corp. reported depreciation expense of $ 800,000 on its income statement, but on its 2020 income tax return, Melvin claimed CCA of $ 1,200,000. The 2020 income statement also included $ 150,000 in warranty expenses that will be deducted for tax purposes when it will be paid. Melvin's income tax rates are 30% for 2020 and 2021, and 24% for 2022 and 2023. The depreciation difference and warranty expense will reverse over the next three years as follows:

Depreciation Difference Warranty Expense

2021 $160,000 $ 30,000

2022 140,000 50,000

2023 100,000 70,000

$400,000 $150,000

These were Melvin's only reversible differences. At December 31, 2020, Melvins deferred tax balance should be

a.

$67,800 Liability.

b.

$67,800 Asset.

c.

$90,000 Liability.

d.

$37,800 Asset.

e.

$75,000 Liability.