Whirlwind Cycles is owned 100% by Daniel, a single taxpayer. Both Whirlwind Cycles and Daniel use the cash method of accounting for tax purposes. Whirl Cycles is organized as a C Corporation and the corporation pays all of its after-tax cash flows to Daniel as a dividend. The business incurred the following items of income and expense in Year 2: Cash Sales Interest received from City of Flint Bonds (this is a municipal bond) Cost of Goods Sold (assume cash paid in Year 2) Cash payments for Year 2 utilities Cash payments for Year 2 rent Tax depreciation Cash contribution to the Democratic party (not deductible for tax purposes) $225,000 3,000 45,000 3,500 18,000 40,000 1,000 On 1/1, Year 1, Whirlwind Cycles purchased a 60-month zero coupon bond with a 5% yield and a $20,000 maturity value for $15,670 (compounded annually). Daniel's taxable income is $100,000 before any profits from the business are considered. Daniel files as a single tax payer. (a) How much interest income does Whirlwind cycles need to recognize from the zero coupon bond in Year 2? (5 pts) (b) What is the taxable income of Whirlwind Cycles in Year 2? (5 pts) (c) What is the after-tax cash flow of Whirlwind Cycles in Year 2? (5 pts) Hint: the total tax due in Year 2 of Whirlwind Cycles is 25,058 (d) Calculate Daniel's Year 2 after-tax cash flows from the Whirlwind Cycles. (5 pts) Hint: This is a dividend payment. So consider what tax rate Daniel needs to pay on the cash payment.