Costello Corporation Reported Pretax Book Income of $500,000

Costello Corporation reported pretax book income of $500,000. During the current year, the reserve for bad debts increased by $5,000. In addition, tax depreciation exceeded book depreciation by $40,000. Finally, Costello received $3,000 of tax-exempt lifeinsurance proceeds from the death of one of its officers. Using a tax rate of 34%, Costello's deferred income tax expense or benefit would be:

A) $11,900 net deferred tax expense.
B) $15,300 net deferred tax benefit.
C) $11,900 net deferred tax benefit.
D) $15,300 net deferred tax expense.