Sheridan Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $3275000 Estimated litigation expense 4275000 Extra depreciation for taxes (6270000) Taxable income $ 1280000 The estimated litigation expense of $4275000 will be deductible in 2021 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $2090000 in each of the next 3 years. The income tax rate is 20% for all years. The deferred tax liability to be recognized is

$855000.

$1254000.

$1054000.

$655000