On January 1, Year 2, WVC Inc. had depreciable assets with a book value of $920,000 and a historical cost of $1,000,000. CCA totalling $100,000 had been taken on these assets. During Year 2, depreciation of $80,000 and CCA of $20,000 had been taken on these assets. The tax rate in effect is 35%. For Year 2, the temporary differences arising from the above would result in:

Select one:

a. a decrease to income tax expense of $7,000.

b. a decrease to income tax expense of $14,000

c. an increase to income tax expense of $7,000.

d. a decrease to income tax expense of $21,000.