milzan co., which began operations on january 1, year 2, recognizes revenue from long-term construction contracts using the input method based on costs incurred in its financial statements and under the completed-contract method for income tax reporting. under the completed-contract method, revenue and gross profit are recognized only upon completion of the project. income under each method follows: completed- percentage- year contract of-completion year 2 $ -- $300,000 year 3 400,000 600,000 year 4 700,000 850,000 there are no other temporary differences. if the applicable tax rate is 25%, milzan should report in its balance sheet at december 31, year 4, a deferred income tax liability of $105,000 $195,000 $162,500 $87,500