XYZ Company has the following balances at the beginning of the current year related to income tax accounts: Gross DTA: $500,000 Gross DTL: ($175,000) Net DTA: $325,000 Valuation Allowance: ($325,000) The changes in the gross DTA and DTL for the current year are $250,000 DR. and ($175,000) CR, respectively. Assume there are no naked credits or character of income concerns. Management has not changed its assessment of the need for a 100% valuation allowance against the net DTA. What entry is necessary to maintain the same level of valuation allowance coverage?

A. DR I/S Deferred income tax expense $75,000 CR B/S Valuation allowance $75,000

B. DR B/S Valuation allowance $100,000 CR I/S Deferred income tax expense $100,000

C. DR I/S Deferred income tax expense $325,000 CR B/S Valuation allowance $325,000

D. DR B/S Valuation allowance $325,000 CR I/S Deferred income tax expense $325,000