Problem 3

.| Metro by T-Mobile 4:" 11:19 PM '17 5% C} B ezto.mheducation.com 3. Award: 20.00 points For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,000,000. Selected information for 2021 from Fidelity's records follows: Interest income on municipal governmental bonds 5 56.000 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 38,000 Actual warranty expenditures in 2021 23,000 80,000 136,000 Fidelity's income tax rate is 25%. At January 1, 2021, Fidelity's records indicated balances of zero and $14,000 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 Requlred 1 51 Required 2 Determine the amounts necessary 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.) Show IQIIA Pretax accounting income Permanent difference Income subiect to taxation Temporary dlfference Required 1 GJ )