Exercise 16-14 Multiple differences (L016-4, 16-6] For the year ended December 31, 2018, Fidelity Engineering reported pretax accounting income of $985,000. Selected information for 2018 from Fidelity's records follows: $33,600 57,400 Interest income on municipal bonds Depreciation claimed on the 2018 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 2018 89,000 27,200 16,800 Fidelity's income tax rate is 40%. At January 1, 2018, Fidelity's records indicated balances of zero and $12,640 in its deferred tax asset and deferred tax liability accounts, respectively. Required: 1. Determine the amounts necessary to record income taxes for 2018 and prepare the appropriate journal entry. 2. What is Fidelity's 2018 net income