Gen Combo Looseleaf Intermediate Accounting; Connect Access Card
10th Edition
ISBN: 9781260696325
Author: David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting Income of $992,000. Selected Information for
2021 from Fidelity's records follows:
Interest income on municipal governmental bonds
Depreciation claimed on the 2021 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 2021
Fidelity's Income tax rate is 25%. At January 1, 2021, 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 2021, and prepare the appropriate journal entry.
2. What is Fidelity's 2021 net income?
Complete this question by entering your answers in the tabs below.
Required 1
Calculation
Required 1 GJ Required 2
Pretax accounting income
Permanent difference
Determine…
16. Umasa Company reported rental revenue of P2,210,000 in the cash basis income tax return for the year ended November 30, 2020. Rent receivable – Nov. 30, 2020 is P1,060,000; Rent receivable – Nov. 30, 2019 is P800,000; and Uncollectible rent written off during the fiscal year is P30,000. Under accrual basis, what amount should be reported as rent revenue?
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a. P1,920,000
b. P2,240,000
c. P2,500,000
d. P1,980,000
For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,020,000. Selected information
for 2021 from Fidelity's records follows:
Interest income on municipal governmental bonds
Depreciation claimed on the 2021 tax return in excenn
of depreciation on the income statement
Carrying amount of depreciable anseta in excess
of their tax basis at year-end
Warranty expense reported on the income statement
Actual warranty expenditures in 2021
$ 76,000
100,000
176,000
48,000
38,000
Fidelity's income tax rate is 25%. At January 1, 2021, Fidelity's records indicated balances of zero and $19,000 in its deferred tax asset
and deferred tax liability accounts, respectively.
Required:
1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry.
2. What is Fidelity's 2021 net income?
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