Choice "A" is correct. Interim period tax expense is the estimated annual effective tax rate (25% in this case) applied to the year-to-date income before taxes minus the tax expense recognized in previous interim periods. Since this question involves the first quarter, there are no previous interim periods. 25% x $200,000$50,000.
Choice "c" is incorrect. Income tax expense is reported in interim income statements.
Choice "b" is incorrect. The Year 2 annual estimated tax rate, not the first quarter effective tax rate, is used to calculate income tax expense for interim statements.
Choice "d" is incorrect. The Year 2 annual estimated tax rate, not the Year 1 annual effective tax rate, is used to calculate income tax expense for interim statements.