During Its First Year of Operations, 2014, the Cocoa Company $\quad$

During its first year of operations, 2014, the Cocoa Company reported both a pretax financial and a taxable loss of $300,000. The income tax rate is 30% for the current and future years. Due to a sufficient backlog of sales orders, Cocoa did not establish a valuation allowance to reduce the $90,000 deferred tax asset. However, early in 2015, one major customer, representing 60% of the 2015 year-end sales backlog, went bankrupt. Cocoa now believes that it is more likely than not that 75% of the deferred tax asset will not be realized. The entry to record the valuation allowance would be

A) Income Tax Expense $\quad$$\quad$ 67,500
Deferred Tax Asset $\quad$$\quad$ 67,500

B) Income Tax Benefit from Operating
Loss Carryforward $\quad$$\quad$$\quad$$\quad$ 67,500
Deferred Tax Asset $\quad$$\quad$$\quad$$\quad$$\quad$ 67,500

C) Income Tax Expense $\quad$$\quad$$\quad$ 67,500
Allowance to Reduce Deferred
Tax Asset to Realizable Value $\quad$$\quad$$\quad$ 67,500

D) Allowance to Reduce Deferred Tax
Asset to Realizable Value $\quad$$\quad$ 67,500
Income Tax Expense $\quad$$\quad$ 67,500