In its first year, Firm KZ recognized $427,300 ordinary business income and a $13,590 loss on the

Question:

In its first year, Firm KZ recognized $427,300 ordinary business income and a $13,590 loss on the sale of an investment asset. In its second year, Firm KZ recognized $500,800 ordinary business income and a $19,300 Section 1231 gain and a $7,400 Section 1231 loss on two sales of operating assets.
a. Compute KZ’s book and tax income for its first year.
b. Using a 34 percent tax rate, compute KZ’s deferred tax asset or liability (identify which) on its on the last day of the year.
c. Compute KZ’s book and tax income for its second year.
d. Compute KZ’s deferred tax asset or liability (identify which) on its on the last day of the year. Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...