In its first year, Firm KZ recognized $488,000 ordinary business income and a $16,400 loss on the sale of an investment asset. In its second year, Firm KZ recognized $514,000 ordinary business income, a $23,350 Section 1231 gain, and a $8,010 Section 1231 loss on two sales of operating assets. Required: Compute KZs book and taxable income for its first year. Using a 21 percent tax rate, compute KZs deferred tax asset or liability (identify which) on its balance sheet on the last day of the year. Compute KZs book and taxable income for its second year. Compute KZs deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year.