For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows:

Pretax accounting income $ 300,000

Permanent difference (15,000 )

285,000

Temporary difference-depreciation (20,000 )

Taxable income $ 265,000

Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?

Multiple Choice

A) $5,000.

B) $35,000.

C) $20,000.

D) $8,750