For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $396,000. Selected information for 2021 from Fidelity’s records follows: Interest income on municipal governmental bonds $52,000 Depreciation claimed on the 2021 tax return in excess 76,000 Of depreciation on the income statement Carrying amount of depreciable assets in excess 128,000 Of their tax basis at year-end Warranty expense reported on the income statement 36,000 Actual warranty expenditure in 2021 26,000 Fidelity’s income tax rate is 25%. At January 1, 2021, Fidelity’s records indicated balances of zero and $13,000 in its deferred tax asset and deferred tax liability accounts, respectively. Required: Determine the amounts necessary to record income taxes for 2021 and prepare the appropriate journal entry. What is Fidelity’s 2021 net income?
For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $396,000. Selected information for 2021 from Fidelity’s records follows:
Interest income on municipal governmental bonds $52,000
Of depreciation on the income statement
Carrying amount of depreciable assets in excess 128,000
Of their tax basis at year-end
Warranty expense reported on the income statement 36,000
Actual warranty expenditure in 2021 26,000
Fidelity’s income tax rate is 25%. At January 1, 2021, Fidelity’s records indicated balances of zero and $13,000 in its
Required:
- Determine the amounts necessary to record income taxes for 2021 and prepare the appropriate
journal entry . - What is Fidelity’s 2021 net income?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
