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For the year ended december 31 2013 fidelity engineering

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Reference no: EM13485077

For the year ended December 31, 2013, Fidelity Engineering reported pretax accounting income of $977,000. Selected information for 2013 from Fidelity's records follows:

Interest income on municipal bonds $ 32,000
Depreciation claimed on the 2013 tax return in excess of depreciation on the income statement
55,000
Carrying amount of depreciable assets in excess of their tax basis at year-end
85,000
Warranty expense reported on the income statement
26,000
Actual warranty expenditures in 2013
16,000

 Fidelity's income tax rate is 40%. At January 1, 2013, Fidelity's records indicated balances of zero and $12,000 in its deferred tax asset and deferred tax liability accounts, respectively.
Required:
1.

Determine the amounts necessary to record income taxes for 2013 and prepare the appropriate journal entry.

2.

What is Fidelity's 2013 net income?

Reference no: EM13485077

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