The following information relates to Sally Travels for its first year of operations (data in millions of dollars): Pretax accounting income: $507 Pretax accounting income included: Overweight fines (not deductible for tax purposes) 5 Depreciation expense 100 Depreciation in the tax return 260 Depreciation in the tax return 260 The applicable tax rate is 25%. There are no other temporary or permanent differences. Sally Travel's balance sheet at the end of its first year would report a:

tax liability of $40 million among current liabilities.

deferred tax asset of $40 million among noncurrent assets.

deferred tax asset of $40 million among current assets.

deferred tax liability of $40 million among noncurrent liabilities.