Larkin co. reported a taxable loss of $10,000 in 20x1, its first year of operations, and taxable income of $0 in 20x2. larkin had no temporary or permanent differences in either 20x1 or 20x2. at the end of 20x1 larkin believed that 30% of the operating loss carryforward would not be realized; therefore, a valuation allowance of $1,200 (30% of $10,000 nol × 40% tax rate) was necessary. at the end of 20x2, larkin believes that the valuation allowance is no longer necessary. assuming a tax rate of 40%, larkin should report total income tax expense (benefit) in 20x1 and 20x2 of: a. $0 in 20x1 and $0 in 20x2.b. $(4,000) in 20x1 and $0 in 20x2.c. $(2,800) in 20x1 and $0 in 20x2.d. $(2,800) in 20x1 and $(1,200) in 20x2.