Answered step by step
Verified Expert Solution
Question
1 Approved Answer
For the year ended December 31, 2016, Fidelity Engineering reported pretax accounting income of $982,000. Selected information for 2016 from Fidelitys records follows: Interest income
For the year ended December 31, 2016, Fidelity Engineering reported pretax accounting income of $982,000. Selected information for 2016 from Fidelitys records follows: |
Interest income on municipal bonds | $ | 33,000 |
Depreciation claimed on the 2016 tax return in excess of depreciation on the income statement | 56,500 | |
Carrying amount of depreciable assets in excess of their tax basis at year-end | 87,500 | |
Warranty expense reported on the income statement | 26,750 | |
Actual warranty expenditures in 2016 | 16,500 | |
Fidelity's income tax rate is 40%. At January 1, 2016, Fidelity's records indicated balances of zero and $12,400 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. a) |
b) Record 2016 income taxes.
2. | What is Fidelitys 2016 net income? |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started