Fidelitys income tax rate is 40 at january 1 2013 fidelitys

Reference no: EM13482544

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:

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: EM13482544

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