Interest income on municipal governmental bonds $ 92,000 Depreciation claimed on the 2021 tax return in excess of depreciation on the income statement 116,000 Carrying amount of depreciable assets in excess of their tax basis at year-end
Interest income on municipal governmental bonds $ 92,000 Depreciation claimed on the 2021 tax return in excess of depreciation on the income statement 116,000 Carrying amount of depreciable assets in excess of their tax basis at year-end
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 12P: Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax...
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Question
For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,036,000. Selected information for 2021 from Fidelity’s records follows:
| Interest income on municipal governmental bonds | $ | 92,000 |
of depreciation on the income statement |
116,000 | |
| Carrying amount of depreciable assets in excess of their tax basis at year-end |
208,000 | |
| Warranty expense reported on the income statement | 56,000 | |
| Actual warranty expenditures in 2021 | 46,000 | |
Fidelity's income tax rate is 25%. At January 1, 2021, Fidelity's records indicated balances of zero and $23,000 in its
Required:
1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate
2. What is Fidelity’s 2021 net income?
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