Please help with the following questions
Question 1
The Swirlie Suitcase Co. reported $600,000 financial net income for the year 12/31/2015. Consider the following additional information.
Swirlie had a deferred tax asset at the beginning of the year of $10,000. The tax asset is due to an unused carryforward of a previous net operating loss. The Company used accelerated depreciation for tax purposes that resulted in an additional (for 2015) reduced asset basis of $12,000. The $12,000 reduced basis is in additional to any previous year’s reductions. Swirlie owns City of Cleveland bonds that yielded $45,000 interest income. During the year the Company paid $11,000 to repair products sold that was still under warranty. Based on sales for 2015, the Company estimates that an additional warranty expense of $40,000 will be incurred for next year, so they charged warranty expense for the $40,000. Assuming the tax rate, current and future, is 20%, how much income tax do they owe for 2015?
Question 2
Company A issued $2,000,000, 20 year, bonds on April 1st of 2017. The bonds are dated January 1, 2017 and pay 6% interest. The market rate on April 1st is 6%. How much will Company A receive when the bonds are issued?
