Assume corporate tax rates are a constant 35%. Elco started operations at the beginning of this year. Its book income is $10 million and its taxable income is $13 million. The difference will give rise to:
a. deferred tax liability of $1,050,000
b. deferred tax asset of $1,050,000
c. income taxes payable of $3,500,000
d. income tax expense of $4,550,000