On January 1, Year 2, GHI Inc

On January 1, Year 2, GHI Inc.had expensed $100,000 more of warranty expenses than it had deducted for income tax purposes to date.During Year 2, the company had deducted $150,000 more in warranty costs on its Year 2 tax return than it had accrued for that year.The income tax rate for Years 2 and prior was 20%.The tax rate for future years was expected to be 25%.This rate was enacted during Year 2.For Year 2, the temporary differences arising from the above would result in:

A) an increase to income tax expense of $30,000.A corresponding DTL of $10,000 would also be recorded as the end of Year 2.
B) a decrease to income tax expense of $32,500.A corresponding DTA of $12,500 would also be recorded as the end of Year 2.
C) a decrease to income tax expense of $30,000.A corresponding DTA of $10,000 would also be recorded as the end of Year 2.
D) an increase to income tax expense of $32,500.A corresponding DTL of $12,500 would also be recorded as the end of Year 2.