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For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,048,000. Selected information for 2021 from Fidelitys records follows: Interest income
For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,048,000. Selected information for 2021 from Fidelitys records follows:
Interest income on municipal governmental bonds | $ | 104,000 |
Depreciation claimed on the 2021 tax return in excess of depreciation on the income statement | 128,000 | |
Carrying amount of depreciable assets in excess of their tax basis at year-end | 232,000 | |
Warranty expense reported on the income statement | 62,000 | |
Actual warranty expenditures in 2021 | 52,000 | |
Fidelity's income tax rate is 25%. At January 1, 2021, Fidelity's records indicated balances of zero and $26,000 in its deferred tax asset and deferred tax liability accounts, respectively. Required: 1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry. 2. What is Fidelitys 2021 net income?
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