Sanchez Construction Company elected to change its method of accounting from the percentage-of-completion method to the completed-contract method. Prior-years income (cumulative) would have been S330,000 lower if Sanchez had always used the completed contract method. The company is subject to a 40% tax rate. Prepare the journal entry to record the change in method. (Record debits first, then credits. Exclude explanations from any journal entries.) Account Current Year Cash Construction in Progress Deferred Tax Asset Deferred Tax Liability Inventory Miscellaneous Expense Retained Earnings
Sanchez Construction Company elected to change its method of accounting from the percentage-of-completion method to the completed-contract method. Prior-years income (cumulative) would have been S330,000 lower if Sanchez had always used the completed contract method. The company is subject to a 40% tax rate. Prepare the journal entry to record the change in method. (Record debits first, then credits. Exclude explanations from any journal entries.) Account Current Year Cash Construction in Progress Deferred Tax Asset Deferred Tax Liability Inventory Miscellaneous Expense Retained Earnings
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 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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