XYZ Corp. recently reported a valuation allowance on deferred tax assets of $477,000. If instead, the company had increased the allowance to $2 million, what impact would this change have on net income for the year (show your work)?

a. It would decrease net income by $1,523,000

b. It would increase net income by $1,523,000

c. It would not affect net income, which is calculated net of any valuation allowance

d. It is not possible to determine because total deferred tax expense is not known