Old Sciences Corporation - Valuation allowance Below is the statement of income and expense for the firm's first two years of operations. On the balance sheet at 12/31/23 Old Sciences has a deferred tax asset (liability) of $5,205 ($2,860). No valuation allowance has been set up. Assume that taxable income was $26,314 for 2022 and no timing differences related to 2023. Tax rate equals 21%. Statement of Income For the years ended December 31, 2023 2022 Net sales $ 184,565 $ 158,956 Cost of sales 146,284 118,890 Gross profit 38,281 40,066 Selling and general expenses 15,032 17,417 Depreciation Expense 4,168 3,528 Loss on sale of business unit 71,200 Loss on the sale of stock 8,200 Operating profit (60,319) 19,121 Other income, principally interest 4,345 3,585 Earnings (Loss) before provision for income taxes (55,974) 22,706 a) Record the effect of the 2023 loss on taxes and any related valuation allowance. b) Recalculate the valuation allowance based on the following information (each item should be considered as an independent option; the company will only do one or the other, but not both): 1) The company can sell held-to-maturity securities for a $30,000 gain. 2) The company can sell a non-essential piece of equipment and recognize a 1245 gain of $29,000