For the year ended December 31, 2016, Fidelity Engineering reported pretax accounting income of $978,000. Selected information for 2016 from Fidelity’s records follows: Interest income on municipal bonds $ 32,200 Depreciation claimed on the 2016 tax return in excess of depreciation on the income statement 55,300 Carrying amount of depreciable assets in excess of their tax basis at year-end 85,500 Warranty expense reported on the income statement 26,150 Actual warranty expenditures in 2016 16,100 Fidelity's income tax rate is 40%. At January 1, 2016, Fidelity's records indicated balances of zero and $12,080 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. (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). Interest on municipal bonds? Depreciation? Warranty expense?
1. Record 2016 income taxes.
2. What is Fidelity’s 2016 net income? (Enter your answer in thousands and round your answer to 2 decimal places.)