Item$15$

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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:

Compute KZ$$s book and taxable income for its first year.

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

Compute KZ$$s book and taxable income for its second year.

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

Note: Round your final answers to the nearest whole dollar amount. 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.