Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please highlight answers! For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,040,000. Selected information for 2021 from Fidelity's records

Please highlight answers!

image text in transcribed

image text in transcribed

image text in transcribed

For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,040,000. Selected information for 2021 from Fidelity's records follows: $ 96,000 120,000 Interest income on municipal governmental bonda Depreciation claimed on the 2021 tax return in excess of depreciation on the income statement Carrying amount of depreciable asseta in excess of their tax basis at year-end Warranty expense reported on the income atatement Aetual warranty expenditures in 2021 216,000 58,000 48,000 Fidelity's income tax rate is 25%. At January 1, 2021, Fidelity's records indicated balances of zero and $24,000 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 Fidelity's 2021 net income? Complete this question by entering your answers in the tabs below. Required 1 Calculation Required 1 GJ Required 2 Det Required 1 calculation hecessary 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 S Recorded as: 5 1.040 Pretax accounting income Permanent difference Warranty expense Income subject to taxation Temporary difference ( 5 58 1,098 X Taxable income (income tax return) $ 1.098 Required 16) For the year ended December 31, 2021. Fidelity Engineering reported pretax accounting income of $1,040,000 S for 2021 from Fidelity's records follows: information Interest income an municipal governmental bands Depreciation esined on the 2021 tax return in excess of depreciation on the Incoge statement Carrying amount of depreciable assets in excess of their tax basis at year-end Warranty expense reported on the income atatement Actunl Warranty expenditures in 2021 6 96,000 120,000 216,000 58,000 4,000 Fidelity's income tax rate is 25%. At January 1, 2021, Fidelity's records indicated balances of zero and $24.000 nits 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 Fidelity's 2021 net income? Complete this question by entering your answers in the tabs below. Required l Calculation oured 1 Required 2 Prepare the appropriate journal entry. (If no entry is required for a transaction/event, select "No joumal entry required in the first account field, Round intermediate calculations to 2 decimal places. Enter your answers in thousands le 5 500 should be entered as 5.5). View transaction list Journal entry worksheet Record 2021 income taxes. Note: Enter dabib bafore credits. Transaction Debit Credit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The TL 9000 Guide For Auditors

Authors: Mark Kempf

1st Edition

087389510X, 978-0873895101

More Books

Students also viewed these Accounting questions

Question

outline some of the current issues facing HR managers

Answered: 1 week ago