Mathis Co. at the end of 2017, its first year of operations, prepared reconciliation between pretax financial income and taxable income as follows: Pretax financial income Estimated litigation expense Installment sales Taxable income 48. S 800,000 2,000,000 1600.000) $ 1,200,000 The estimated litigation expense of $2,000,000 will be deductible in 2019 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $800,000 in each of the next two years. The income tax rate is 30% for all years. The income tax expense is A. S400,000 B. $800,000. C. $240,000. D. $360,000. Cross Company reported the following results for the year ended December 31, 2017, its first year of operations 49. 2017 S 1,500,000 Income (per books before income taxes) 2,400,000 Taxable income The disparity between book income and taxable income is attributable to a temporary difference which will reverse in 2018. What should Cross record as a net deferred tax asset or liability for the year ended December 31, 2017, assuming that the enacted tax rates in effect are 40% in 2017 and 35% in 2018? A. $360,000 deferred tax liability B. $315,000 deferred tax asset C. S360,000 deferred tax asset D.S315,000 deferred tax liability