At the beginning of 2024, a construction company that began operations in 2022 changed from the completed-contract method to thepercentage-of-completion method for accounting purposes but not for tax purposes. Gross profit figures under both methods for thepast three years appear below:202220232024Completed-Contract$565000725000800000$2090000Percentage-of-Completion$101000010500001150000$3210000The company reports two years of comparative statements. Assuming an income tax rate of 20% for all years, the effect of thisaccounting change on prior periods after taxes should be reported by a credit ofO $616000 on the 2024 income statement.O $356000 on the 2023 retained earnings statement.O $896000 on the 2023 income statement.O $896000 on the 2024 retained earnings statement.

When a corporation changes its accounting system, the cumulative impact on previous periods must be…

At the beginning of 2024, a construction company that began operations in 202 percentage-of-completion method for accounting purposes but not for tax purp past three years appear below: 2022 2023 2024 Completed-Contract $565000 725000 800000 Percentage-of-Completion $1010000 1050000 1150000

At the beginning of 2024, a construction company that began operations in 202 percentage-of-completion method for accounting purposes but not for tax purp past three years appear below: 2022 2023 2024 Completed-Contract $565000 725000 800000 Percentage-of-Completion $1010000 1050000 1150000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Subject - account