1. Interest and Dividends Paid. Johnson Corporation has operating income of $120,000, pays interest charges of $60,000, and pays dividends of $20,000. What is the company’s tax liability? 2. Net...

1. Interest and Dividends Paid. Johnson Corporation has operating income of $120,000, pays interest charges of $60,000, and pays dividends of $20,000. What is the company’s tax liability?

2. Net Operating Loss Carryback and Carryforward. The Kenneth Parks Company’s taxable income and tax payments/liability for the years 2003 through 2008 are given below.

Year       Taxable Income ($)        Tax Payments ($)

2003       100,000                22,250

2004       50,000                  7,500

2005       (150,000)            0

2006       100,000                 22,250

2007       50,000                   7,500

2008       50,000                   7,500

Compute the Company’s tax refund in 2005.