For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $1,036,000. Selected information for 2024 from Fidelity's records follows: Interest income on municipal governmental bonds. Depreciation claimed on the 2024 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 2024 Fidelity's income tax rate is 25%. At January 1, 2024, Fidelity's records indicated balances of zero and $23,000 in its deferred tax asset and deferred tax liability accounts, respectively. Required: 1. Determine the amounts necessary to record income taxes for 2024, and prepare the appropriate journal entry. 2. What is Fidelity's 2024 net income? Complete this question by entering your answers in the tabs below. Required 1 Calculation General Journal Description Pretax accounting income Permanent difference. Required 2 Determine the amounts necessary to record income taxes for 2024. Note: Enter your answers in thousands rounded to 1 decimal place. Amounts to be deducted should be indicated with a minus sign. Income subject to taxation Temporary difference Taxable income (income tax return) Amount X Tax Rate $ 1,036.0 $ 1,036.0 X X $ 1,036.0 X < Required 1 Calculation = = $ 92,000 116,000 208,000 56,000 46,000 Tax Recorded as: General Journal >
For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $1,036,000. Selected information for 2024 from Fidelity's records follows: Interest income on municipal governmental bonds. Depreciation claimed on the 2024 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 2024 Fidelity's income tax rate is 25%. At January 1, 2024, Fidelity's records indicated balances of zero and $23,000 in its deferred tax asset and deferred tax liability accounts, respectively. Required: 1. Determine the amounts necessary to record income taxes for 2024, and prepare the appropriate journal entry. 2. What is Fidelity's 2024 net income? Complete this question by entering your answers in the tabs below. Required 1 Calculation General Journal Description Pretax accounting income Permanent difference. Required 2 Determine the amounts necessary to record income taxes for 2024. Note: Enter your answers in thousands rounded to 1 decimal place. Amounts to be deducted should be indicated with a minus sign. Income subject to taxation Temporary difference Taxable income (income tax return) Amount X Tax Rate $ 1,036.0 $ 1,036.0 X X $ 1,036.0 X < Required 1 Calculation = = $ 92,000 116,000 208,000 56,000 46,000 Tax Recorded as: General Journal >
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 47P
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Transcribed Image Text:For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $1,036,000. Selected information
for 2024 from Fidelity's records follows:
Interest income on municipal governmental bonds
Depreciation claimed on the 2024 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 2024
Fidelity's income tax rate is 25%. At January 1, 2024, Fidelity's records indicated balances of zero and $23,000 in its deferred tax asset
and deferred tax liability accounts, respectively.
Required:
1. Determine the amounts necessary to record income taxes for 2024, and prepare the appropriate journal entry.
2. What is Fidelity's 2024 net income?
Complete this question by entering your answers in the tabs below.
Required 1
Calculation
General
Journal
Description
Pretax accounting income
Permanent difference
Required 2
Determine the amounts necessary to record income taxes for 2024.
Note: Enter your answers in thousands rounded to 1 decimal place. Amounts to be deducted should be indicated with a minus
sign.
Income subject to taxation
Temporary difference
Taxable income (income tax return)
Amount X Tax Rate
$ 1,036.0
$ 1,036.0 X
$ 1,036.0 X
< Required 1 Calculation
=
=
=
=
$ 92,000
116,000
208,000
56,000
46,000
Tax
Recorded as:
General Journal >
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