In 2007, Hay Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of $1,500,000. The facilities were sold in March 2008 and a $1,500,000 loss was recognized for tax purposes. Also in 2007, Hay paid $100,000 in premiums for a two-year life insurance policy in which the company was the beneficiary. Assuming that the enacted tax rate is 30% in both 2007 and 2008, and that Admire paid $780,000 in income taxes in 2007, the amount reported as net deferred income taxes on Hay balance sheet at December 31, 2007, should be a:
a. $420,000 asset.
b. $360,000 liability
c. $450,000 asset