In its first year, Firm KZ recognized $$457,500$ ordinary business income and a $$13,250$ loss on the sale of an investment asset. In its

second year, Firm KZ recognized $$518,000$ ordinary business income, a $$20,350$ Section $1231$ gain, and a $$8,070$ Section $1231$ loss on

two sales of operating assets.

Required:

a$.$ Compute KZ$\text{'}$s book and taxable income for its first year.

b$.$ Using a $21$ percent tax rate, compute KZ$\text{'}$s deferred tax asset or liability $($identify which$)$ on its balance sheet on the last day of the

year.

c$.$ Compute KZ$\text{'}$s book and taxable income for its second year.

d$.$ Compute KZ$\text{'}$s deferred tax asset or liability $($identify which$)$ on its balance sheet on the last day of the second year.

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Req A and B $,$ Req C and D

c$.$ Compute KZ$\text{'}$s book and taxable income for its second year.

d$.$ Compute KZ$\text{'}$s deferred tax asset or liability $($identify which$)$ on its balance sheet on the last day of the second year.

Note: Round your intermediate computations and final answer to nearest whole dollar amount.