For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $1,004,000. 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 $15,000 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 T Answer is complete but not entirely correct. 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 Recorded as: Pretax accounting income Amount S 1,004.0 $ 60,000 84,000 144,000 40,000 30,000 X Tax Rate Tax
For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $1,004,000. 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 $15,000 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 T Answer is complete but not entirely correct. 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 Recorded as: Pretax accounting income Amount S 1,004.0 $ 60,000 84,000 144,000 40,000 30,000 X Tax Rate Tax
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
4
Transcribed Image Text:For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $1,004,000. 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 $15,000 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
Taxable income (income tax return)
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
Recorded as:
Pretax accounting income
Permanent difference
Interest on governmental bonds
Income subject to taxation
Temporary difference
Depreciation
Depreciation
> >
> Answer is complete but not entirely correct.
Amount
$ 1,004.0
$ 60,000.0 X
$ 61,004.0
✓ $ (84,000.0)
Is
(144,000.0)
(166,996.0)
$
Tax Rate
25%✔ =
25% ✔ =
25% ✔
25%
=
=
Tax
$ 15,251.0
$
(21,000.0)
(36,000.0)
$
(41,749.0)
Deferred tax liability
Income tax expense
Income tax expense
Income tax payable
$ 60,000
84,000
144,000
40,000
30,000
X
×
✓
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education