The following table illustrates the differences between a companys contract revenue and recognized revenue for a four-year contract.

Contract revenue source	Year 1	Year 2	Year 3	Year 4
Financial Statements	$40,000	$0	$0	$0
Tax Return	$10,000	$10,000	$10,000	$10,000

Assume tax rates of 40% in Year 1 and 50% in all other years.

How much deferred income tax liability should the company recognize at the end of Year 1?

A. 12,000

B. 15,000

C. 16,000

D. 20,000