Question

For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting Income of $1,028,000. Selected Information for 2021 from Fidelity's records follows: $ 84,000 108,000 Interest income on municipal governmental bonds Depreciation claimed on the 2021 tax return in excess of depreciation on the income statement Carrying amount of depreciable assets in excess of their tax basis at year-end Warranty expense reported on the income statement Actual warranty expenditures in 2021 192,000 52,000 42,000 Fidelity's Income tax rate is 25%. At January 1, 2021, Fidelity's records indicated balances of zero and $21,000 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?

Answer 1

Answers O Determine the amounts necorary to record income taxes for 2001? 25-) -27 Dekend Tat Labbrly Tourate/ Tax & Recorded as. pre-Tan acounting income 41,012 permanent. Difference. fraterest.on municipal bende 4-84 fin.com, subject to faclio $944X 254 0 36 income Tax Expense. Temporary Ollesence Depreciation warranty Expen. 10 91254: 25_selsemed far asset Tascable income 14846 x ast. | 24.5 lincome Tax payable =) income subject to-laxation - $1088 +(-34) = 944 =) servonta srpense = (52,000 -- 42,000) = 10,000 Fisansaction.__Generel Journal Debat codes.com income Tax Expenses Deferred Tax Asset $2.5 Defrord Tori flisbility $27. income Tax payable $94.5 $236

fidelity's SON net income ☺ weet income = pre --Tay amount - income Taz Expense = $1,008-$236 = $792 oonet income = $792