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As of December 31, 2015, LOL had a deferred tax liability of $80,000 and income...

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Accounting

As of December 31, 2015, LOL had a deferred tax liability of $80,000 and income tax payable of $20,000. During 2016, LOL paid taxes of $60,000. LOL reported tax expense of $20,000 in their 2016 financial reports and an income tax payable of $30,000. Which of the following statements is true? Please explain.

a. In 2016, LOLs deferred tax liability increased by $30,000

b. In 2016, LOLs deferred tax liability decreased by $40,000

c. In 2016, LOLs deferred tax liability decreased by $50,000

d. In 2016, LOLs deferred tax liability increased by $50,000

e. In 2016, LOLs deferred tax liability decreased by $40,000

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