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For the year ended December 31, 2016, Fidelity Engineering reported pretax accounting income of $979,000....

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Accounting

For the year ended December 31, 2016, Fidelity Engineering reported pretax accounting income of $979,000. Selected information for 2016 from Fidelitys records follows:

Interest income on municipal bonds $ 32,400
Depreciation claimed on the 2016 tax return in excess of depreciation on the income statement 55,600
Carrying amount of depreciable assets in excess of their tax basis at year-end 86,000
Warranty expense reported on the income statement 26,300
Actual warranty expenditures in 2016 16,200

Fidelity's income tax rate is 40%. At January 1, 2016, Fidelity's records indicated balances of zero and $12,160 in its deferred tax asset and deferred tax liability accounts, respectively.

Required:
1.

Determine the amounts necessary to record income taxes for 2016 and prepare the appropriate journal entry, record 2016 income taxes & determine the final 2016 net income.

. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands rounded to two decimal places (i.e. 1,230 should be entered as 1.23).)

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