Krasco inc.'s auditors prepared the following reconciliation between book and taxable income. the corporation has a 34% tax rate. book income before tax $8,288,900net permanent differences (35,770)net temporary differences 112,400taxable income $8,365,5301. compute krasco's tax expense per books and tax payable.2. compute krasco's net increase in deferred tax assets or deferred tax liabilities (identify which) for the year.

income tax expense         2,806,064.2 debit

deferred income tax (benefit) 38,216 debit

   income tax payable                          2,844,820.2   credit

Explanation:,

income before taxes                  8,288,900

permanent difference                    (35,770)

accounting taxable income:       8,253,130

temporary difference                     112,400

taxable income                          8,365,530

income tax expense:

will be calculate considering the accounting income:

8,253,130 x 34% =  2,806,064.2

income tax payable:

will be calcualte considering the temporary difference:

8,365,530 x 34% = 2,844,820.2

the difference will be deferred income tax

2,844,820.2 - 2,806,064.2 = 38,216

a

explanation: