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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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