4 Q4: (6 marks) The records of Rony Company showed the following: Year 1: $-800,000 operating loss per books adjusted for permanent book/tax differences. $120,000 favorable Permanent book/tax differences. $90,000 unfavorable Temporary book/tax differences. Year 2: $900,000 net income per books adjusted for permanent book/tax differences. $100,000 favorable Permanent book/tax differences. Additional data Temporary book/tax differences of year 1 are reversed with the same amount in year 2. Tax rate is 35% and the company operating loss of Year 1 is carried forward. Required (show calculations) Compute tax benefit (negative tax benefit) for year 1. Compute taxable income for Year 2. Compute tax expense for year 2. Compute taxable expense for Year 2. Compute reduction in deferred tax asset or deferred tax liability from Year 1 to Year 2