ANSWER: A

Excess tax depreciation P2,000,000

Unamortization computer software cost 3,000,000
Taxable temporary differences P5,000,000

Deferred tax liability (P5,000,000 x 35%) P1,750,000

Deferred tax liabilities are the amounts of income taxes payable

in future periods in respect of taxable temporarily differences.
Taxable temporary differences are temporary differences that
will result in taxable amounts in determining taxable profit (tax
loss) of future periods when the carrying amount of the asset or
liability is recovered or settled.
Temporary differences are differences between the carrying
amount of an asset or liability in the statement of financial
position and its tax base