For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $980,000. Selected information for 2021 from Fidelitys records follows:

Interest income on municipal governmental bonds	$	36,000
Depreciation claimed on the 2021 tax return in excess of depreciation on the income statement		60,000
Carrying amount of depreciable assets in excess of their tax basis at year-end		96,000
Warranty expense reported on the income statement		28,000
Actual warranty expenditures in 2021		18,000

Fidelity's income tax rate is 25%. At January 1, 2021, Fidelity's records indicated balances of zero and $9,000 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?

Complete this question by entering your answers in the tabs below.

• Required 1 Calculation
• Required 1 GJ
• Required 2

Determine the amounts necessary to record income taxes for 2021. (Enter your answers in thousands rounded to 1 decimal place. Amounts to be deducted should be indicated with a minus sign.)

			Tax Rate %		Tax $	Recorded as:
Pretax accounting income	$980
Permanent difference
Income subject to taxation	$980	x
Temporary difference
		x		=
		x		=
Taxable income (income tax return)	$980	x		=

Prepare the appropriate journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations to 2 decimal places. Enter your answers in thousands (i.e., 5,500 should be entered as 5.5).)

Journal entry worksheet

• Record 2021 income taxes.

What is Fidelitys 2021 net income? (Round intermediate calculations to 2 decimal places. Enter your answers in thousands (i.e., 5,500 should be entered as 5.5).)

Net income