For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $1,000,000. Selected information for 2024 from Fidelity's records follows: Interest income on municipal governmental bonds $ 56,000 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 80,000 136,000 Warranty expense reported on the income statement 38,000 28,000 Actual warranty expenditures in 2024 Fidelity's income tax rate is 25%. At January 1, 2024, 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 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 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. Description Pretax accounting income Permanent difference Interest on governmental bonds Income subject to taxation Temporary difference Depreciation 69 $ Amount X Tax Rate $ 1,000.0 (56.0) $ X 944.0 = II X = Tax Recorded as:
For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $1,000,000. Selected information for 2024 from Fidelity's records follows: Interest income on municipal governmental bonds $ 56,000 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 80,000 136,000 Warranty expense reported on the income statement 38,000 28,000 Actual warranty expenditures in 2024 Fidelity's income tax rate is 25%. At January 1, 2024, 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 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 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. Description Pretax accounting income Permanent difference Interest on governmental bonds Income subject to taxation Temporary difference Depreciation 69 $ Amount X Tax Rate $ 1,000.0 (56.0) $ X 944.0 = II X = Tax Recorded as:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $1,000,000. Selected information
for 2024 from Fidelity's records follows:
Interest income on municipal governmental bonds
$ 56,000
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
80,000
136,000
Warranty expense reported on the income statement
38,000
28,000
Actual warranty expenditures in 2024
Fidelity's income tax rate is 25%. At January 1, 2024, 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 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
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.
Description
Pretax accounting income
Permanent difference
Interest on governmental bonds
Income subject to taxation
Temporary difference
Depreciation
69
$
Amount
X
Tax Rate
$ 1,000.0
(56.0)
$
X
944.0
=
II
X
=
Tax
Recorded as:
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