For the year ended December 31, 2018, Fidelity Engineering reported pretax accounting income of $995,000. Selected information for 2018 from Fidelitys records follows:

Interest income on municipal bonds	$	35,600
Depreciation claimed on the 2018 tax return in excess of depreciation on the income statement		60,400
Carrying amount of depreciable assets in excess of their tax basis at year-end		94,000
Warranty expense reported on the income statement		28,700
Actual warranty expenditures in 2018		17,800

Fidelity's income tax rate is 40%. At January 1, 2018, Fidelity's records indicated balances of zero and $13,440 in its deferred tax asset and deferred tax liability accounts, respectively. Required: 1. Determine the amounts necessary to record income taxes for 2018 and prepare the appropriate journal entry. 2. What is Fidelitys 2018 net income?