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For the year ended December 31, 2016, Fidelity Engineering reported pretax accounting income of $989,000. Selected information for 2016 from Fidelity's records follows Interest income

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For the year ended December 31, 2016, Fidelity Engineering reported pretax accounting income of $989,000. Selected information for 2016 from Fidelity's records follows Interest income on municipal bonds Depreciation claimed on the 2016 tax return in excess of depreciation on the income statement Carrying amount of depreciable assets in excess of their tax basis at year-end Warranty expense reported on the income statement Actual warranty expenditures in 2016 $ 34,400 58,600 91,000 27,800 17,200 Fidelity's income tax rate is 40%. At January 1, 2016, Fidelity's records indicated balances of zero and $12,960 in its deferred tax asset and deferred tax liability accounts, respectively. Required 1. Determine the amounts necessary to record income taxes for 2016 and prepare the appropriate journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands rounded to two decimal places (i.e. 1,230 should be entered as 1.23).) Tax Rate % Tax $ Recorded as: $ 989.00 Pretax accounting income Permanent difference Interest on municipal bonds Income subject to taxation Temporary difference Depreciation $989.00 x arranty expense Taxable income (income tax return) $ 989.00 x

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