The company reported pretax financial income in its income statement of $50,000. Among the items included in the computation of pretax financial income were the following:
Interest revenue from municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,000
Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000
Warranty expenses (not deductible until actually provided;
none provided this year) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
The income tax rate is 30%. Compute the following:
(1) financial income subject to tax,
(2) taxable income,
(3) income tax expense, and
(4) net income.